US crude oil settles up $1.17, at $52.86 a barrel

Getty Images

Oil rose for a third straight session on Monday as OPEC forecast greater demand for crude this year than previously thought and projected less supply from countries outside the group.

Data from last week showing the U.S. oil rig count at a three-year low also bolstered prices, which were attempting to find a floor after a brutal selloff in crude that wiped out over half of the market's value since June.

Benchmark Brent oil futures were last up 60 cents, about 1 percent, above $58 a barrel, after revisiting Friday's one-week peak of $59.06.

U.S. crude futures, or WTI, settled up $1.17, at $52.86 a barrel after rising to $53.40 earlier.

Read MoreOPEC is to blame for the oil swoon: BIS

WTI's front-month contract, March CLH5, was at its narrowest discount in a week to the second month, April CLJ5, as strong gains in oil for prompt delivery reduced some of "contango" that made it profitable to store crude for future delivery.Both WTI and Brent have gained nearly 20 percent since a Jan. 29 rebound inspired by better confidence in the supply outlook for crude following a seven-month-long selloff that took prices down by more than 50 percent.

Oil higher by 2%, rate hike fears weigh
Oil higher by 2%, rate hike fears weigh

"The harder you fall, the stronger you often rebound, from a statistical point of view," said Phil Flynn, analyst at the Price Futures Group in Chicago.

"But I think there is still a lot of denial that the market has hit bottom, and you'll continue seeing people standing in front of the rally for a selling opportunity."

While Monday's sentiment in oil was predominantly bullish, some traders sounded caution over rising tensions surrounding Greek debt negotiations, and how that could affect the broader European macroeconomic picture and demand for energy.

OPEC, or the Organization of the Petroleum Exporting Countries, forecast demand for the cartel's oil will average 29.21 million barrels per day (bpd) in 2015, up 430,000 bpd from its previous forecast.

In its monthly report, the group also slashed its outlook for crude supply growth in non-OPEC countries, citing a slowdown in the U.S. shale boom and lower capital investment by energy firms.

Meanwhile, data from U.S. oil services firm Baker Hughes on Friday showed that the number of rigs drilling for oil in the United States fell to 1,140 last week, the lowest since December 2011.