Oil prices rose more than three per cent this afternoon and tipped Brent crude above $55 a barrel as a Wall Street rally and news of Saudi Arabia supply cuts to Asia buoyed the market.
Global benchmark Brent crude was up 3.32 per cent, or $1.78 to $55.42 a barrel, while West Texas Intermediate crude was up 3.27 per cent, or $1.66, to $52.48.
Yesterday, prices reached their lowest level in a month.
Wall Street shares rose, taking oil with them, ahead of President-elect Donald Trump's first press conference since the day of his election, as investors waited for Trump to provide more details about his plans for the world's biggest economy. The S&P 500 later slipped into negative territory and many stocks pared gains once he began speaking.
Prices were also lifted by news that Saudi Arabia, leader of consortium the Organisation of the Petroleum Exporting Countries (Opec), has told some of its Asian customers that it will slightly reduce their crude supplies in February.
This has boosted optimism that cuts agreed by Opec at the end of November will be successful. The 13-member group agreed to cut production by 1.2m barrels per day (bpd), capping its daily output at 32.5m bpd.
However, oil output is set to fall by almost 1.8m bpd in total, when a second agreement with 11 non-Opec members that was agreed in December is counted.
The price rise today has come despite US government data showing a much bigger-than-expected weekly increase in US crude and fuel inventories.
The sharp rise in crude inventories came in at a 4.1m barrel build in the week to 6 January, according to the Energy Information Administration, higher than analyst expectations for a 1.2m barrel build.
Data released by US oilfield services provider Baker Hughes on Monday showed US energy companies added oil rigs for the 10th week in a row to 529, extending a recovery in activity into an eighth month.