Some analysts said the continued rise in USA oil production could act as a drag on the current rally.
Oil rose for a fifth day on Monday, on track for its strongest first quarter in eight years, thanks to a growing belief among investors that OPEC's supply cuts will prevent a build-up in unused fuel, though concern over China's economy tempered gains. It had at that time bought about six million barrels of the US crude oil under a single tender for delivery between November 2018 and January 2019. This bullish signal combined with renewed optimism coming from both the US and China that they had made some progress in last week's trade talks.
Oil has risen almost 25 percent so far this year and is on course for its strongest first-quarter performance since 2011, thanks largely to a commitment by the Organization of the Petroleum Exporting Countries and allies to cut output.
India has emerged as Venezuela's biggest crude buyer in February after USA imposed sanctions on Latin American nation's oil giant PDVSA, NDTV news channel reported.
The WTI Crude Oil market found buyers after initially dipping during the trading session on Tuesday, testing the $55 level.
Traders in financial markets are hopeful the United States and China would soon resolve their trade disputes. "Venezuela is real, but can we believe OPEC and Russian Federation?"
To stop a buildup of inventories that could weigh on prices, the group of OPEC and non-OPEC producers known as OPEC+ began a new supply cut of 1.2 million bpd on January 1. This continued the 2018 trend, in which China recorded the first annual drop in vehicle sales on record.
USA energy companies last week increased the number of oil rigs looking for new supply by three to a total of 857, energy services firm Baker Hughes said in a report last Friday.
The company has previously purchased USA oil from spot markets and signed a mini-term deal in August to buy 6 million barrels of us oil between November and January.
That means the U.S. rig count is higher than a year ago when fewer than 800 rigs were active.