"And so we see the potential for Brent crude to go to $70 a barrel over the course of the year". If government data on Wednesday confirms that forecast, it would send a strong bullish signal to the market, said John Kilduff, a partner at Again Capital Management in NY.
International Brent crude futures were at $57.42 per barrel at 0742 GMT, up 9 cents, or 0.2 per cent from their last close. Oil futures have gained more than 7 percent since last Monday.
"Momentum is coming back into the market from very depressed price levels", Petromatrix strategist Olivier Jakob said.
A few other factors are contributing to the almost two-week rally. Last Thursday, all three major USA stock indexes plunged by 2 percent after a dire revenue warning from Apple heightened fears of a global economic slowdown.
Meanwhile, US standard WTI crude was trading up by one per cent to $48.45. With both countries already starting to suffer from the effects of the trade war, there is pressure on both governments to reach an accord.
Crude is seeing a tentative recovery after fears of oversupply and weakening global growth drove prices to their worst annual slump since 2015.
Crude oil prices are up sharply Monday morning, extending gains to a sixth successive session, amid easing worries about global growth and energy demand after reports indicated a possible meeting of U.S. President Donald Trump and China's vice president Wang Qishan later this month.
But looming over the OPEC-led cuts is a surge in USA oil supply - now the world's top producer - driven by a steep rise in onshore shale drilling. Saudi Arabia lowered its output by 401,000 barrels a day last month to 10.6 million barrels a day.
"Very high Saudi and Russian production, in particular, has heightened supply volatility, so whether Opec and Russia maintain production discipline and renew agreements to limit output are key concerns going into the new year", said Steve Wood, Moody's managing director, oil and gas. "Less sharply rising USA oil production may also play its part in this".
The US production of shale oil, which has added 5 mmbbl of oil to US output over the last decade to move America onto a similar level as Saudi Arabia and Russian Federation at around 11 mmbbl a day, has put a consistent downward pressure on oil prices in recent years. To be sure, there is not a consensus on this point.
Opec's primary challenge this year would be to address the physical market imbalances, and assert credibility to consistently manage expectations and sentiment, the bank cautioned. Nevertheless, the outlook appears dramatically tighter than it did in December.