Oil prices have risen after the sentiment gained a boost for a market recovery due to tightening of supply, as well as an improving outlook worldwide.

Front-month Brent LCOc1 crude futures rose 65 cents and traded at $39.37 a barrel, while the US West Texas Intermediate (WTI) futures reached $36.57 a barrel, up 65 cents, Reuters reported.

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Traders said that strengthening of the sentiment led to a rise in oil prices, with large amounts of short positions being closed.

"Traders said that strengthening of the sentiment led to a rise in oil prices."

Energy companies in the US reduced their oil rig count as producers cut drilling costs in order to focus on uncompleted wells, data highlighted last week.

A glut of physical oil remains, which is again expected to weigh on prices.

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In 2015, the companies cut an average of 18 oil rigs per week, wiht a total of 963 for the year.

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Oil services company Baker Hughes said that energy companies removed eight oil rigs in the week ending 4 March.

Julius Baer head of commodities research Norbert Ruecker told the news agency: "The past days’ oil price rally was from our perspective less related to a shift in fundamentals but a recovery of sentiment."