Oil prices are firmer before Crude Oil inventories that are expected to post the seventh consecutive weekly decline in stockpiles.
The sharp sell off earlier this year caused some producers to reduce output and the trickle down effects are now being felt in both inventories and the price of oil.
The weaker dollar has also supported prices. Prior consensus of a rate hike has been squashed causing the then strong dollar to weaken.
Oil has rallied over 40% from the lows observed in early 2015 but many analysts are still cautious and feel there could be further downside.
“We’re not in the clear as far as the supply-demand balance. In some ways, we think this whole situation is getting worse,” said Vikas Dwivedi, head of oil strategy at Macquarie.