Investing.com - West Texas Intermediate oil futures rose sharply on Monday to rebound from the previous session's steep declines amid indications U.S. oil drillers are cutting back on production following a collapse in prices over the summer.
Crude oil for delivery in November on the New York Mercantile Exchange rallied $1.16, or 2.58%, to trade at $46.18 a barrel during U.S. morning hours after rising to a session high of $46.39.
On Friday, Nymex oil prices plunged $2.18, or 4.62%, after the Federal Reserve’s downbeat assessment of the global economy hurt investor sentiment.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. decreased by eight last week to 644, the third straight weekly decline.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery climbed 84 cents, or 1.78%, to trade at $48.32 a barrel.
Brent futures lost $1.61, or 3.28%, on Friday, as ongoing worries over the health of the global economy fueled concerns that a global supply glut may stick around for longer than anticipated.
Crude oil prices have been under heavy selling pressure in recent months, as ongoing concerns over a glut in world markets drove down prices.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $2.14 a barrel, compared to $2.45 by close of trade on Friday.
In the week ahead, investors will be turning their attention to Wednesday’s index of manufacturing activity from China and surveys on private sector activity from the euro zone for a fresh indication on the strength of the global economy.
Market players will also be focusing on U.S. durable goods data to gauge the likelihood of a near-term interest rate hike.