Oil prices rose more than 1% today after an OPEC report showed its production fell sharply last month, easing some concerns about prolonged oversupply.
Brent crude was up 82 cents, or 1.3%, at $62 a barrel this afternoon. Brent has risen more than 2% this week, its third week of gains in a row.
US West Texas Intermediate (WTI) crude futures were up 78 cents, or 1.5%, at $52.85 a barrel.
The Organization of the Petroleum Exporting Countries along with other producers including Russia agreed last year to output cuts starting from January 1 aimed at averting a glut.
OPEC's monthly report showed it had made a strong start in December even before the pact went into effect, implementing the biggest month-on-month production drop in almost two years.
Expectations that the US may grant waivers on sanctions it imposed on importing Iranian oil to fewer countries could also ease concerns about oversupply.
Analysts said the combination of production cuts by OPEC, especially the Saudis and tightening sanctions on Iranian oil exports have brought the market close to balance.
Tempering support for prices, however, are signs of weakening demand and surging US output.
The International Energy Agency said today that US oil production growth combined with a slowing global economy would put oil prices under pressure.
"By the middle of the year, US crude output will probably be more than the capacity of either Saudi Arabia or Russia," said the IEA.
The agency kept its estimate of oil demand growth unchanged and close to 2018 levels at 1.4 million barrels bpd.
Markets were also buoyed by signs that the US and China might soon resolve their trade dispute in talks scheduled for January 30.