The price of global benchmark Brent crude oil reached almost $63 per barrel on Monday from $59 per barrel mark on Friday, according to official figures, amid claims that non-OPEC producers like the U.S. and Russia do not have influence over oil prices like Saudi Arabia.
"Indian and Chinese November numbers show that India has strong demand, while China is more of a mixed picture," said Richard Mallinson, a geopolitical analyst at the London-based energy market consultancy, Energy Aspects.
"Indian demand averages 3.61 million barrels a day in November, which was higher year-on-year by 5 percent, and the third highest level on record," he said.
"Chinese apparent consumption – before stocking or destocking – was 10.29 million barrels a day in November, which is higher year-on-year by around 3 percent," he added.
The Asian markets showed signals of recovery when they opened strong on Monday morning but Mallinson believes that is not the main factor in oil price elevation.
"There hasn’t been a decisive turnaround in Asian demand growth or the macroeconomic picture in the Asian countries," he said.
The Brent crude oil price has fallen almost 50 percent since June, and reached $58 mark last Tuesday, the lowest level since July 2009.
The American benchmark for oil prices, West Texas Intermediate, fell below the $55-per-barrel mark for the first time since May 2009 and was traded around $54 the same day.
- OPEC rules out production cut
Saudi Arabia and the United Arab Emirates said on Sunday that OPEC will not cut production to increase falling oil prices, claiming that the glut of oil supply in world markets and low prices are being caused by non-OPEC producers.
"Saudi Arabia took a stance and the oil market has responded to that. They made a decision and they will stick with it," said Virendra Chauhan, an oil analyst for Energy Aspects.
The oil cartel met on Nov. 27 to devise a strategy against the price slump, but decided to maintain production at 30 million barrels of oil per day for the first half of 2015.
Although a number of small and medium-size oil producers, led by Venezuela, called for production cuts to increase the falling prices to preserve their oil-revenue dependent economies, Saudi Arabia, Kuwait and United Arab Emirates were against supply cuts.
"Large non-OPEC oil producers, like the U.S. and Russia, have never been swing producers," Chauhan said.
"They never had a desired target price, although much non-OPEC production does rely on higher oil prices," he added.
Chauhan highlighted that higher oil prices have allowed Russian production to have a steady growth path over the past three years, and allowed U.S. shale oil to be brought on the market.
However, oil experts warn that many companies in the U.S. and Russia will have to cut their capital expenditure because of falling prices.
Chauhan expects prices to be under pressure in the early new year: "And with the OPEC decision not to cut production, we will see more inventory build."
"For the first half of 2015, we forecast $70 per barrel and below, and there will be fluctuations around that. However, prices may pick up in March or April," he concluded.