Crude futures rose in early trading on Monday after gaining more than 15 percent last week, with some indicators pointing to the possibility that the market is showing signs of bottoming out.
International Brent futures had climbed around half a dollar, or 1.4 percent, from their last close to $35.58 per barrel early Monday.
U.S. West Texas Intermediate crude futures were up 18 cents at $32.96 a barrel after gaining over 15 percent the previous week.
Analysts said that first signs of a strengthening market outlook were appearing after a 20-month rout that has seen prices fall by 70 percent.
"The U.S. crude market also seems to have passed the worst point and crude runs should start creeping higher taking pressure off inventory levels. The latest EIA data on U.S. production is also supportive as it indicates that the low prices are finally having an impact," said Richard Gorry, director of JBC Energy Asia.
But he added that there was also "still a lot of downside risk" due to the huge overhang in production and stored supplies.
"The Russian/Saudi production freeze talks continue to support the market, while in the U.S., shale producers continue to pull rigs from the ground in an effort to reduce spending. Baker Hughes data suggest U.S. oil rig counts fell by 13 to 400," ANZ Bank said.
Market data also suggests early signs of shifting sentiment.
The amount of open positions in WTI crude contracts that bet on a further fall in prices has fallen over 17 percent since mid-February to their lowest level in 2016, although by historic levels their amount remains high.
At the same time, financial speculators have sharply raised their bullish bets on oil after talk of a global production freeze and signs of falling U.S. shale crude output and growing gasoline demand.
Money managers raised their combined net long position in crude futures and options in New York and London by nearly 16 percent for the week ended Feb. 23, data by the U.S. Commodity Futures Trading Commission (CFTC) showed.
"The increase in speculative net longs in the CFTC report certainly reflects some traders' belief that oil has put in a near term bottom after the 20-month long selloff," said Chris Jarvis, an analyst at Caprock Risk Management in Frederick, Maryland.