Oil prices extend gains amid OPEC report

Oil prices continued to advance Monday as the Organization of the Petroleum Exporting Countries ( OPEC) cut crude production forecast of this year.

OPEC said on Monday in its monthly oil market report that non- OPEC oil supply is projected to grow by 850,000 barrels a day in 2015, down 420,000 barrels from the previous assessment.

According to the OPEC report, the main factors for the lower growth prediction this year are price expectations, a declining number of active rigs in North America, a decrease in drilling permits in the United States and a reduction in the 2015 spending plans of international oil companies.

In the previous session, the crude prices were supported by data from service company Baker Hughes showing the number of rigs drilling for oil in the country fell by 9 percent to 1,140 last week, the lowest level since December 2011.

Meanwhile, a list of energy giants planned to slash investment this year as lower crude prices bite into group profits.

Analysts said the OPEC report and Friday's Baker Hughes numbers were adding to positive sentiment to the oil prices, but it may be just "a short-term correction after hitting a six-year low." There would be a lot of volatility as the supply and demand is on the way of rebalancing, they said.

Light, sweet crude for November delivery moved up 1.17 U.S. dollars to settle at 52.86 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for December delivery rose 54 cents to close at 58.34 dollars a barrel.