The market is up slightly so far this week after dropping for the past five weeks.
Fund managers are now holding two long positions for every short position at this point - marking one of the most bearish oil price markets since prices fell in 2014.
"It has moved a long way in response to that news".
Opec states and 11 other exporters agreed in May to extend cuts of 1.8-million barrels per day (bpd) until March, in the hope that it would force global supply and demand to align. A separate report showed that USA oil producers are pumping at 9.35 million barrels per day, which is the highest level of production since August 2015.
"The possibility that US refinery utilization may have likely peaked this calendar year, when combined with rising output, points to the prospect of higher crude-oil inventories", Geoffrey Craig, oil futures editor S&P Global Platts, wrote in a note late Monday.
In an interview with CNBC, Paul Ciana of Bank of America Merrill Lynch offered up some interesting views for oil, including that "the crude crush could actually be signaling a rally in the bond market".
Short covering and a weaker dollar have combined to maintain the rally in oil prices while the latest inventories data will be important in determining whether the recovery can be sustained.
As the global oil market frets about a stubborn supply glut, faltering demand growth in key Asian crude importers is further hampering efforts to restore market balance.
Oil advanced for a fourth day in NY, its longest run of gains in a month, on estimates that US crude inventories continued their decline from record levels seen earlier this year.
USA drillers last week added rigs for the 23rd week in a row, according to data from energy services company Baker Hughes, implying that further gains in domestic production are ahead.