Oil prices rose early on Monday as industry experts anticipated that the market may have touched the bottom prices. Despite, the reported rise in stockpiles due to overwhelming pumping by the US Shale producers, the price rose on Monday.
Brent crude futures were trading at $48.44 per barrel at 0101 GMT, up 29 cents, or 0.6, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $46.09 per barrel, up 26 cents, or 0.6 percent.
The rise in prices of futures was result of substantially low oil prices which investors assume will raise substantially as OPEC led production cuts effects kick in.
The experts also expect a rise in the oil prices in the coming few weeks, as the current prices at their current position are lowest in the last month. Investors hope to make profits from the price rise.
However, financial markets may have anticipated the price bottoming out and do not expect it to go further deep into the coming days; physical market is worried over the glut. The physical markets expect a further fall in the prices in the coming few days.
However, the strengthening oil stockpiles and a continuous increase in the production capacities in US have negated any expected benefits from the OPEC led cuts.
Furthermore, Middle East tension may bode well for the oil prices as the region continues to become instable in the next few months after Kingdom of Saudi Arabia (KSA) cut off diplomatic ties with Qatar.