Crude oil prices climbed Rs 61 to Rs 4,033 per barrel in futures trade today as participants raised bets on positive global cues.
Brent crude fell from a two-week high as the market weighed forecasts for a surge in US production against OPEC's success in accelerating the pace of draining a global glut.
According to traders, the higher prices of American oil are due to the reduced capacity of the Canadian oil pipeline Keystone at the end of past year due to a leak.
London Brent crude was up 46 cents, or 0.7 percent, at $65.30, after rising more than 3 percent last week.
The Brent variety was moving in the red zone because of the rise in the USA dollar, which also affects demand, making commodities denominated in dollars more expensive for countries using other currencies.
"The drawdown in inventory has been supportive for WTI, with the Brent-WTI spread narrowing from nearly US$7 per barrel at the end of December to around US$3.20 a barrel now".
In the Singapore market, oil prices last Thursday extended gains from the previous session, pushed up by a weak dollar and comments from Saudi Arabia that it would rather see an undersupplied market than end a deal with the Organisation of the Petroleum Exporting Countries (Opec) and Russian Federation to withhold production.
Last week, major oil producer Saudi Arabia reaffirmed its alliance with OPEC and non-OPEC producers, including Russian Federation, in an attempt to reduce about 2 percent in inventories worldwide. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC stocks outside North America are also believed to decline this year and the next. The panel's forecast for the market reaching equilibrium later this year assumes that Libya and Nigeria keep output at January levels and other participants in the deal maintain full compliance with cuts. The agreement is due to expire at the end of this year.
Saudi Arabia has been lobbying to keep prices high by instigating a production cut for both OPEC and non-OPEC partner countries.
In addition, the number of installations for drilling oil wells in the USA last week increased by 7 pieces to 798 - the highest value since April 2015, the data of the oil service company Baker Hughes showed on February 16.
United States crude stockpiles have continued to build in recent weeks, but exports have grown - leaving something of a hole at the chief U.S. oil hub at Cushing, Oklahoma.