Oil prices were up slightly on Monday morning as the number of U.S. rigs drilling for more oil production declined.
Crude Oil WTI Futures for April delivery were trading at $62.16 a barrel in Asia at 1:45 GMT, up 0.19%. Brent Oil Futures for May delivery, traded in London, were up 0.20% at $65.62 per barrel.
U.S. energy companies last week cut oil rigs for the first time in almost two months, with drillers reducing four rigs, to 796.
However, despite the lower rig count, activity remains significantly higher than a year ago when just 617 rigs were active. The increase in rig count points to more output to come in the future.
The output from the U.S. has already risen by 23 percent since mid-2016 to 10.37 million barrels per day (bpd). It has already surpassed top exporter Saudi Arabia, and by 2019 is expected to surpass top producer Russia, which pumps out nearly 11 million bpd.
This will pose a significant challenge for the Organization of the Petroleum Exporting Countries, which has been trying to prop up oil prices by cutting production.
OPEC has been reducing output by around 1.2 million bpd since January 2017. However, the U.S. has simply filled the supply gap created by OPEC producers by ramping up production, consequently dragging down prices.
Oil markets remain volatile due to excess supply. However, a booming job market in the U.S. is supporting prices. The U.S. economy added the biggest number of jobs in more than a year in February, with non-farm payrolls jumping by 313,000 jobs last month, the Labor Department said on Friday.
The industry hopes an increase in jobs will drive higher fuel demand.
Soaring demand from Asia, particularly China, will continue to support prices. According to the International Energy Agency, annual global oil demand growth will average a fairly strong 1.1 percent to 2023.
