Investing.com - Oil prices recorded hefty gains in North America trade on Monday, with West Texas Intermediate futures climbing above the $33-level after the International Energy Agency said it expected U.S. shale production to fall this year and next.
Crude oil for April delivery on the New York Mercantile Exchange surged $1.70, or 5.35%, to trade at $33.45 a barrel by 14:45GMT, or 9:45AM ET, after rising by as much as $1.88, or 5.6%, to an intraday peak of $33.63, the most since February 1.
The International Energy Agency said in its medium-term outlook on Monday that U.S. shale oil production was expected to fall by 600,000 barrels per day this year and another 200,000 bpd in 2017.
Prices found further support amid indications U.S. oil drillers are cutting back on production. According to industry research group Baker Hughes, the number of rigs drilling for oil in the U.S. decreased by 26 last week to 413, the ninth straight weekly decline.
A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the future.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for April delivery jumped $1.55, or 4.7%, to trade at $34.56 a barrel as investors continued to hope for a production freeze from the Organization of Petroleum Exporting Countries.
Top oil producers Russia and Saudi Arabia agreed to freeze oil production at January levels last week. While Iran said it supported any measure that would help stabilize global oil markets, it stopped short of committing to a freeze in production.
Oil futures are down nearly 70% since the summer of 2014. Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at $1.11 a barrel, compared to a gap of $1.26 by close of trade on Friday.