Despite today's losses, US oil is heading for its biggest monthly gain in nearly a year.
West Texas Intermediate crude, the US benchmark, is currently down 1.1 per cent at $38.96 per barrel. Nevertheless, it's gained around 13 per cent so far this month, putting it on course for its largest jump since April last year.
So where has the recent optimism which has helped stem the black stuff's slippery decline come from?
Output freeze deal
Oil markets have been rife with speculation Opec and non-Opec producers will agree an output freeze deal to support prices at a meeting in Doha next month.
It follows an earlier agreement between Saudi Arabia and Russia to hold production at January levels, providing others oil producers take part.
But analysts have warned any agreement will be meaningless without co-operation from rebel Iran, which has refused to participate until its production returns to pre-sanction levels.
US production tails off
The oversupply of oil has been exacerbated by the Organization of Petroleum Exporting Countries' (Opec) refusal to cut output, in a bid to put the higher cost US shale gas producers out of business.
And while the fledgling industry initially proved more resilient than analysts expected, the cracks are finally starting to appear, with a string of data releases showing production is beginning to tail off.
Despite the chronic supply glut, oil markets are still unable to inoculate themselves from what the industry terms high impact events. Recent outages stemming from pipeline disruptions in Nigeria and Kurdistan have also lent support to oil prices.
Attacks on oil facilities in Nigeria have risen in recent weeks, while an Iraqi Kurdish oil pipeline suffered a three-week outage.