On Monday, oil prices increased by over 3% as concerns about a U.S. recession subsided, and some traders believed that the recent price loss for crude was exaggerated, as it had dropped three weeks in a row for the first time since November.

Despite the possibility that a strong labour market may force the Federal Reserve to maintain higher interest rates for longer, Friday’s positive U.S. jobs data helped oil rise by almost 4%.

By 1330 GMT, Brent crude had increased $2.05, or 2.7%, to $77.35 per barrel. West Texas Intermediate (WTI) crude for the United States increased by $2.05 or 2.9% to $73.39.

According to CMC Markets analyst Tina Teng, “Oil’s rebound follows energy stocks’ rebound on Wall Street last Friday after the U.S. reported strong job data, which reduced worries about an impending economic recession.”

While U.S. crude fell by 7.1% even after Friday’s recovery, Brent ended down approximately 5.3% last week. For the first time since November, both benchmarks declined for three weeks.

According to Saxo Bank’s Ole Hansen, the recent decline in oil prices appeared to be excessive.

“An oversold market condition combined with Brent managing to find support ahead of the March low forced recently established short sellers to seek cover, potentially highlighting that the recent sell-off was overdone,” the analyst added.

Analysts at Goldman Sachs (NYSE:GS) stated on Saturday that worries about rising supplies and near-term demand were “overblown”.

The Organisation of the Petroleum Exporting Countries (OPEC) and its partners, collectively known as OPEC+, are starting a round of voluntary output cutbacks this month. On June 4, the group will meet again.

The United States’ consumer price inflation data for April will be the main topic on Wednesday, and they could impact the Fed’s position on future interest rate decisions.

On Thursday, OPEC is expected to release its most recent monthly oil market report, giving an updated forecast assessment for supply and demand.