Oil prices rose on Monday, putting July on track to become the strongest month so far this year, as news of a producers` technical meeting next week added to bullish sentiment driven by the threat of U.S. sanctions against Venezuela.
Investors also eyed a tightening U.S. market after heavy inventory falls and slower new oil rig additions last week.
"Sentiment in the oil market became very bullish after OPEC said it will meet with partners in Abu Dhabi next week to discuss compliance," said Frank Schallenberger, head of commodity research at LBBW.
Some OPEC and non-OPEC members will meet on Aug. 7-8 in Abu Dhabi to assess how the group can increase compliance with production cuts that began on Jan. 1.
Benchmark Brent crude traded at $52.60 a barrel at 1200 GMT, up 8 cents from Friday`s close. Brent earlier hit $52.92 a barrel, its highest since May 25.
U.S. light crude oil traded briefly above $50 per barrel for the first time in two months before easing back to around $49.71 a barrel, unchanged on the day.
Hedge funds and money managers have raised bullish bets on U.S. crude oil to their highest in three months, U.S. data show.
The United States is considering imposing sanctions on Venezuela`s oil sector in response to Sunday`s election of a constitutional super-body, which Washington has denounced as a "sham" vote.
In Europe, a production outage at Shell`s 404,000 barrel-per-day Pernis refinery in the Netherlands following a fire sent benchmark European diesel margins, which reflect the profit made from refining crude oil into the road fuel, to their highest since November 2015 at $14.60 a barrel.
U.S. production has hampered efforts to rebalance the market but signs the market is tightening have emerged.
"Strong increases in the price of oil ... (were) fuelled in large part by the substantial drawdowns in U.S. inventories over the past several weeks," said William O`Loughlin, analyst at Rivkin Securities.
U.S. crude inventories have fallen by 10 percent from their March peaks to 483.4 million barrels.
U.S. output dipped by 0.2 percent to 9.41 million barrels per day (bpd) in the week to July 21, after rising by more than 10 percent since mid-2016.
Drilling for new U.S. production is also slowing, with just 10 rigs added in July, the fewest since May 2016.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)