Oil prices edged up in early trading on Monday as the peak demand U.S. summer driving season officially kicks off just as its crude production falls to its lowest level since September 2014.
U.S. West Texas Intermediate (WTI) crude futures were trading at $49.44 per barrel at 0108 GMT, up 11 cents from their last settlement.
International Brent futures were at $49.36 a barrel, up 4 cents.
“Oil prices stayed within touch of $50 per barrel despite news that some Canadian oil sands producers were planning on restarting operations,” ANZ said on Monday.
Oil producer Suncor Energy is planning to ramp up output at its oil sands fields in Alberta this week after it was forced to shut down earlier in May due to massive wildfires.
Despite the expected rise in Canadian output, ANZ bank said that WTI price support “still lingers” after the large fall in U.S. oil inventories late last week by 4.2 million barrels to 537 million barrels due to strong demand.
Traders said that the official start to the U.S. peak demand summer driving season, which kicks off with Memorial Day on Monday, was the main reason for rising seasonal demand.
This came just as U.S. crude oil production fell to 8.77 million barrels per day (bpd), the lowest level since September 2014, and down 8.77 percent since their June 2015 peak.
In global oil markets, Brent prices have been supported by a series of supply disruptions in Nigeria, where militants have been staging a wave of attacks on oil pipelines, cutting the country’s output to more than two decade lows.
Attention will also be on a meeting by the Organization of the Petroleum Exporting Countries (OPEC) in Vienna this week, although most analysts do not expect any decisions that would lead to changes in production.