Crude prices pointed higher at the Asia open on Tuesday with data on major global inventories ahead this week in a market looking for signs that demand is bringing down swollen stocks.
On the New York Mercantile Exchange, crude futures for June delivery were quoted at $46.09 a barrel, while on London's Intercontinental Exchange, Brent was at $48.29 a barrel.
A duo of oil reports expected from OPEC and the International Energy Agency (NASDAQ:IEA) on Tuesday and Wednesday, respectively, will set the tone.
The reports will include an update on the state of global crude stockpiles, providing investors with the opportunity to establish whether OPEC and its allies' efforts to drain the glut in supply are starting to take shape.
OPEC and non-OPEC allies last month agreed to extend production cuts for a period of nine months until March last week, but stuck to production cuts of 1.8 million bpd agreed in November last year.
Overnight, crude futures settled higher on Monday, after Saudi Arabia and Russia attempted to quell investor fears concerning the glut in supply, insisting that declines in inventories will accelerate over the near term.
Sentiment on oil prices turned positive after Saudi Energy Minister Khalid al-Falih said inventories are declining and reductions will accelerate in the next three to four months.
Crude futures, however, pared gains in the mid-afternoon U.S. session, after the U.S. Energy Information Administration (EIA) released its monthly report on drilling activity.
The EIA revealed that oil production from seven major U.S. shale plays is projected to rise by 127,000 barrels a day to 5.475 million barrels a day in July from June.
Rising shale output has been one of the catalysts contributing to the recent slump in oil prices as investors fear that a ramp-up in U.S. production could derail the Organization of the Petroleum Exporting Countries (OPEC) and its allies' efforts to restore balance in crude markets.
UBS last week cut its 2017 price forecast by more than 6% for WTI oil to $53 a barrel.