Investing.com - Crude oil prices gained sharply in early Asia on Monday in a rebound from last week's downbeat finish in the U.S. with financial markets in Tokyo shut for a holiday.
On the New York Mercantile Exchange, crude oil for delivery in October jumped 1.44% to $44.25 a barrel.
Last week, oil futures fell sharply on Friday, with U.S. crude prices touching a more than five-week low as signs of an ongoing recovery in U.S. drilling activity combined with increasing exports from OPEC added to concerns over a global supply glut.
Market players continued to focus on U.S. drilling prospects, amid indications of a recent recovery in drilling activity. Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 2 to 416, marking the 11th increase in 12 weeks.
That came after government data published on Wednesday showed large weekly builds in U.S. petroleum products.
According to the U.S. Energy Information Administration, distillate inventories including diesel, increased by 4.619 million barrels last week, much higher than expectations for a rise of 1.543 million barrels.
The jump was the biggest weekly build since January and put distillate stocks at six-year seasonal highs.
The report also showed that gasoline inventories rose by 567,000 barrels, disappointing expectations for a 343,000-barrel drop.
On the ICE Futures Exchange in London, Brent oil for November delivery slumped 82 cents, or 1.76%, on Friday to settle at $45.77 a barrel by close of trade. The contract slid to $45.48 earlier, the lowest since September 2.
Swelling Iranian exports further reinforced fears of a global glut. The third-biggest OPEC producer raised crude exports to more than 2 million barrels per day in August, nearing pre-sanctions levels.
Attention now shifts to the forthcoming meeting between major oil producers later in September to discuss an output freeze.
OPEC members, led by Saudi Arabia and other big Middle East crude exporters, will meet non-OPEC producers led by Russia at informal talks in Algeria between September 26 and 28. According to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative, underscoring the difficulty for political rivals to forge consensus.