Crude prices are rallying due to lower than expected US inventory growth, declining supplies from Libya and hopes the Organisation of the Petroleum Exporting Countries (Opec) will extend output cuts.
The price of global benchmark Brent crude lifted 1.46 per cent this afternoon to $52.08 a barrel while West Texas Intermediate was trading 1.59 per cent higher at $49.14 a barrel.
After gains of more than one per cent yesterday, crude prices spiked when official data from the Energy Information Administration (EIA) confirmed US inventory growth was lower than analysts expected.
Crude stockpiles increased by 0.9m barrels from the previous week for a total of 534m barrels while analysts expected a 1.4m barrel build.
A reduction to Libyan output by around 250,000 barrels per day (bpd) due to conflict in the country has also helped to support crude prices.
Read more: Brent crude has fallen below $50 a barrel
"This has been compounded with renewed optimism in the marketplace via increasingly promising rhetoric that Opec and non-Opec members will look to extend their production cuts beyond the June deadline, as long as heavyweight producer Russia also commits to the agreement," analysts at Accendo Markets said.
Opec is working to reduce oil production from its member countries and other producers, including Russia, by around 1.8m barrels per day (bpd) to prop up prices and cut the global glut.
The six-month agreement has been hindered by suppliers like the US ramping up output to fill the supply gap.