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Oil rallied for a third straight day on Tuesday as bulls convinced the market had hit bottom after a seven-month rout pounced on a weak dollar and cuts in oil firms' spending plans despite signs crude stocks were rising without let up.
Crude prices have gained about 15 per cent since the market was jolted by news on Friday that the number of US oil drilling rigs had fallen their most in a week in nearly 30 years after the 60 per cent selloff that began last summer.
The dollar dropped to a more than one-week low against a basket of currencies on Tuesday, making dollar-priced commodities a more attractive buy.
BP's announcement that it would cut capital expenditure by 13 per cent to $20 billion in 2015, adding to reductions planned by other major energy companies, also fuelled the perception that the global glut in oil supply may be overcome faster than thought.
Benchmark Brent crude oil was up $1.41 at $56.16 a barrel by 1724 GMT, after rallying to a one-month high of $57.23. US crude, or WTI, rose $1.47 to $51.04, having reached $51.55 earlier.
