The oil price rebounded in late trading on Monday after falling earlier in the session on the back of increased drilling in the US.

Oil drillers in the US added new rigs as they face up to the new reality that oil may be US$50 or lower for some time and have adjusted their techniques accordingly to remain profitable.

"Each dollar is being used far more efficiently and, as a result, $50 oil appears much more palatable," Barclays bank said in a note to clients.

There is also a lot of skepticism in the market about rumours that Opec and non Opec members will agree to freeze production when they meet later this month with Iran refusing to make any cuts in order to make up for lost time suffered under western sanctions.

The oil price is expected to remain volatile in the lead up to next week’s interest rate decision from the US Federal Reserve with chances of a rate hike growing by the day which if happens, is expected to hit the oil price hard.

Oil is priced in US dollars and becomes more expensive for holders of other currencies if the greenback strengthens.

“Crude prices have generally come under pressure recently as the likelihood of an interest rate hike from the Federal Reserve later this month has increased, in turn weighing on prices,” said Robbie Fraser, commodity analyst at Schneider Electric.