The rebound comes after oil briefly touched a five-month low earlier this week, pressured by rising production and trade tensions that have curbed global demand. Analysts note that supply risks in key producing regions continue to underpin prices, preventing a sustained fall below the $60 mark.
"Despite the overall bearish sentiment driven by an oil supply glut and weak demand, the risk of supply disruption in hotspots like Russia, Venezuela, Colombia and the Middle East remains in place," said Mukesh Sahdev, founder and CEO of energy consultancy XAnalysts.
Heightened geopolitical tensions contributed to the rally. The postponement of a planned summit between U.S. President Donald Trump and Russian President Vladimir Putin added uncertainty, while U.S. actions against Venezuela, including strikes on vessels suspected of transporting narcotics, have amplified fears of supply disruptions from the Latin American nation.
Investors are also closely watching U.S.-China trade negotiations. Officials from both countries are scheduled to meet in Malaysia this week, and Trump has expressed optimism about reaching a "fair trade deal" with Chinese President Xi Jinping. "Trump's trade negotiation comments are likely providing some support to the market. Further support is likely coming from the cancellation of the Trump-Putin summit," noted strategists at ING Commodities.
Domestic U.S. oil data provided additional support. According to American Petroleum Institute figures, crude, gasoline, and distillate stocks fell last week, signaling tighter supply. The market also responded to plans by the U.S. Department of Energy to purchase one million barrels of crude for its Strategic Petroleum Reserve, an effort to take advantage of lower prices while replenishing national stockpiles.
With supply risks, geopolitical tensions, and trade developments all in play, market analysts say oil prices are likely to remain sensitive to any new developments in the coming weeks.