After a prolonged slide that took oil prices within sight of the $20-a-barrel threshold last month, sentiment in commodity markets seems to have turned, raising the question of whether oil prices have finally bottomed out.
Whether it will prove lasting or not remains to be seen, but the recent rebound in the oil market comes as investors focus on declines in oil drilling and pin their hopes on a freeze in output by major producers.
Crude oil futures traded in New York rose 5.5 percent on Monday to $37.90 a barrel, after rising nearly 4 percent on Friday. The U.S. benchmark price has had three straight weeks of gains, the longest such stretch since May. In London, Brent oil futures rose above $40 a barrel for the first time since December.
Oil markets have bounced back more than 40 percent since hitting of a low of $26.21 a barrel in New York in early February. At the time, many analysts, including forecasters at Goldman Sachs, said that oil could slide to $20 a barrel with little to stem the decline.
But the effect of low oil prices — and the prospect of a sustained slump — has finally started to take hold.
"In commodity circles, low prices cure low prices, just like high prices cure high prices," said Jason Schenker, founder of Prestige Economics, a market research firm.
Monday's rebound came after Baker Hughes, the oil-field services company, said the domestic oil rig count had dropped last week to its lowest level in more than six years, a sign that oil producers are cutting back on output as the low prices make the high-cost rigs uneconomical.
Globally, the number of oil and gas drilling rigs also fell by 130, to 1,761, according to Baker Hughes, the lowest number of rigs since 2002.
In the United States, domestic crude production fell for the sixth week in the week ended Feb. 26, according to the Energy Information Administration. Producers in the U.S. pumped 9.08 million barrels a day, on average, their lowest level since November 2014.
At the same time, the global oil market continues to be substantially oversupplied. In the U.S., domestic stockpiles are at their highest level in more than 80 years, and are still growing.
Oil markets have also been particularly focused on Iran, one of the world's largest producers, which is set to increase its production later this year as sanctions associated with its nuclear program were lifted. For that reason, some analysts believe that the recent rebound does not presage a sustained recovery in prices.
At an oil conference in Houston last month, Ali al-Naimi, Saudi Arabia's oil minister, challenged U.S. oil producers to either cut costs or get out of the business. His comments, however, underscored Saudi Arabia's own responsibility for creating the oil glut and pushing prices down to fend off high-cost American oil production.
Still, oil-dependent countries have become increasingly alarmed at the low prices and have seemed willing to consider steps to correct the oversupply in the market.
Russia's energy minister said late last week that members of the Organization of the Petroleum Exporting Countries would meet with other producers, including Russia, sometime toward the end of March.
While no date or place for the meeting has been set so far, the producers are expected to discuss a production freeze along the lines of what was agreed to last month by Saudi Arabia, Russia, Qatar and Venezuela.
The rebound in oil prices is reaching consumers. Fuel prices at the pump were at $1.81 a gallon on average, according to the automotive group AAA. That is up from $1.74 a gallon a month ago, but still lower than the $2.46 a gallon motorists paid a year ago.
"From a supply-demand standpoint, you will see Iranian barrels increasing, but you will also see U.S. barrels falling," Schenker said. He added that American gasoline consumption had been encouraged by low prices, which have helped sales of sport utility vehicles and light trucks.