US crude output is expanding as shale drillers keep adding rigs, Libya is pumping the most in four years and oil stored in tankers rose to a 2017 high earlier this month.
U.S. drillers last week added rigs for the 23rd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead. "And a slight support from a weak US dollar".
"Any outside interference with a free market is often the wrong thing to do and in the oil market we are seeing that despite the OPEC production cuts, there remains a glut of new supply and growth is disappointing". There, the bloc made a decision to extend cuts through March 2018.
Despite the cuts, which started in January, markets remain well supplied due to rising output elsewhere.
As the weaker dollar made oil cheaper for countries using other currencies, the threat of increased USA drilling activity kept a cap on rises.
Prices of oil took a sharp decline since mid-November of past year, after the crude oil contract shutdown 92 cents at $43.51 United States per barrel.
Analysts and traders told CNBC oil's plunge to the low $40 range has made traders less likely to take out new short positions, or bets that prices will fall further.
In an interview with CNBC, Paul Ciana of Bank of America Merrill Lynch offered up some interesting views for oil, including that "the crude crush could actually be signaling a rally in the bond market".
Iran was allowed a small increase to recover market share lost under Western sanctions.
Commerzbank said in a research note was quoted by the news agency as saying: "Short-term financial investors also significantly scaled back their net long positions in Brent on the ICE last week. and find themselves at their lowest level in a year and a half". Brent advanced 0.6 %to $45.83 on Monday. "If we keep going down, we're not going to be adding rigs in a few months, we're not going to be adding production".
The commodity has fallen almost 20 percent year to date, the biggest first-half slide in 20 years, according to Reuters.
"After how much we've fallen, prices are attractive here as a result, so it's not surprising that we're getting some buying, just on a valuation perspective". Non-OPEC nations must also cut production in order to reverse the supply glut.
USA shale oil output is up around 10 percent since last year, with the number of US oil rigs in operation at the highest in more than three years.