Investing.com - Oil prices turned higher in North American trade on Monday, recovering from earlier losses as investors digested a modest rise in U.S drilling activity.
Crude oil for May delivery on the New York Mercantile Exchange tacked on 45 cents, or 1.09%, to trade at $41.59 by 13:42GMT, or 9:42AM ET, after being down by as much as 1.6% earlier at $40.41.
On Friday, Nymex prices surged to $42.49, the most since December 4, before turning lower to close at $41.14, down 52 cents, or 1.25%.
The U.S. benchmark reversed gain in late trade after oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. increased by one last week to 387, ending three straight months of weekly declines.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
Despite Friday’s losses, New York-traded oil futures jumped $1.27, or 2.44%, last week, the fifth straight weekly rise. Since falling to 13-year lows at $26.05 on February 11, U.S. crude futures have rebounded by approximately 40% as a decline in U.S. shale production boosted sentiment.
However, analysts warned that market conditions remained weak due to an ongoing glut. U.S. crude stockpiles currently stand at all-time highs above 520 million barrels.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for May delivery rose 54 cents, or 1.31%, to $41.74 a barrel. London-traded Brent futures rallied to $42.54 on Friday, a level not seen since December 7, before ending at $41.20, down 34 cents, or 0.82%.
Last week, Brent futures rose 95 cents, or 2.01%, the fourth consecutive weekly gain, as continued hopes major oil producers will discuss a potential output freeze lifted prices.
According to Qatari oil minister Mohammed Bin Saleh Al-Sada, producers from within and outside OPEC will meet in Doha on April 17 to discuss plans for a freeze in output.
The initiative was supported by around 20 OPEC and non-OPEC producers, accounting for about 73% of global oil production, according to Venezuela’s Oil Minister.
Brent futures are up by roughly 40%, since briefly dropping below $30 a barrel on February 11. Short-covering began in mid-February after Saudi Arabia and fellow OPEC members Qatar and Venezuela agreed with non-OPEC member Russia to freeze output at January levels, provided other oil exporters joined in.