The uptick in sentiment on oil prices comes against concerns that falling USA oil demand could weigh on crude futures in the wake of Hurricane Irma which made landfall in the US over the weekend. In August, Opec crude oil production decreased by 79 tbpd to average 32.76 mpbd, " the report stated.
However, crude stockpiles in the USA have ballooned recently as Harvey crippled refinery production in the Texas and Louisiana region.
Oil prices settled higher on Monday amid an uptick in sentiment after Saudi Arabia said its oil minister held talks with counterparts over the possibility of extending the supply-cut agreement beyond March 2018.More news: At least three hurt in shooting at high school in Washington state
The International Energy Agency in its latest monthly market report said overall production levels from major producers was on the decline and the level of stocks for members of the Organization for Economic Cooperation and Development was only slightly above the five-year average.
Nevertheless, the IEA said it was cautious about the extent of any post-recovery rally, saying that "expectations are that markets are tightening and that prices will rise, albeit very modestly".
Brent crude, the global benchmark futures traded 0.7 per cent higher at $54.65 per barrel at the time of writing. Benchmark Brent crude rose 53 cents a barrel or almost 1 percent, to trade at $54.80.More news: South Korea confirms traces of radioactive gas from North Korea's nuclear test
Data from the U.S. Energy Information Administration Wednesday showed that domestic crude supplies climbed by 5.9 million barrels for the week ended September 8.
The EIA also said refinery crude runs fell by 394,000 barrels per day. Refinery utilization rates fell by 2 percentage points to 77.7 percent, the lowest rate since 2008.More news: Barrasso: Sanders' Healthcare Plan 'a Nice Slogan,' But a Bad Idea