Oil prices edged higher on the last trading day of the year on Monday, taking a cue from firmer stock markets, but remain on track for the first yearly decline in three years amid concerns of a supply glut.
Hints of progress on a possible U.S.-China trade deal helped bolster sentiment, which has been battered by concerns over a weaker global economic outlook.
Brent crude futures - the international benchmark for oil prices - rose 17 cents, or 0.3 percent, to $53.38 a barrel by 0115 GMT. Brent has shed about 20 percent in 2018 following two years of successive growth.
U.S. West Texas Intermediate (WTI) crude futures were at $45.52 a barrel, up 19 cents, or 0.4 percent, from their last close. WTI is down nearly 25 percent this year.
Crude prices have been closely tracking equity markets during volatile trading for both asset classes last week.
"Investors are looking for bargains in an illiquid market (today)... If Trump gets over trade issues with China expect economic demand to surge," said Jonathan Barratt, chief investment officer at Probis Securities in Sydney.
"Also, drivers on Iran with waivers ending in May are still not been put to bed. Hence, it could get ugly at any time and I expect this is a diversion for Trump when needed," Barratt added.
U.S. President Donald Trump said he had a "long and very good call" with Chinese President Xi Jinping and that a possible trade deal between the United States and China was progressing well.
Meanwhile, imports of Iranian crude oil by major buyers in Asia hit their lowest in more than five years in November as U.S. sanctions on Iran's oil exports took effect last month.
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