Last week's price rise, totaling roughly 10 percent, was initiated by the large drop in U.S. oil rigs in early October. U.S. oil-directed rigs fell to a five-year low of 614 a few weeks ago, according to Baker Hughes, and then to 605 on Friday.
Further, the U.S. Energy Information Administration estimates that U.S. crude production dropped by 120,000 barrels per day to a 12-month low of 9.01 million barrels per day in September from August. The EIA also raised its oil-demand growth forecasts for 2015 and 2016, while cutting 2015 non-OPEC supply growth. U.S. oil demand continued to expand at a solid pace, up 3.5 percent year-on-year to 19.98 million barrels per day in July.
Finally, senior executives made a number of upbeat comments about the oil price at an industry conference in London. Among others, Fatih Birol, executive director of the International Energy Agency, described this year's oil-investment cuts as the biggest in the history of the sector, with spending on upstream projects down at least 20 percent
Geopolitical developments have also contributed, with market participants rebuilding an oil-price risk premium attached to potential production outages in the Middle East. Fighting in Syria (and Russia's intervention there), plus attacks by ISIS on production facilities in northern Iraq — all of this has raised the risk of outages occurring.