Brent crude futures were hovering just above the $84 mark this morning after a surprise weekend jump of more than $5 a barrel.
The oil price surged after several of the world's largest oil exporters announced an unexpected cut in production.
Saudi Arabia, Iraq and several Gulf states said on Sunday they were reducing their total output by more than one million barrels a day.
The oil price had topped the $120 mark after Russia invaded Ukraine, but was on the retreat in recent months.
The US has actually been calling for producers to increase output in order to push energy prices lower.
High energy and fuel prices last year helped to drive up inflation, putting pressure on many households' finances.
Market uncertainty
Responding to news of the latest cut, a spokesperson for the US National Security Council said: "We don't think cuts are advisable at this moment, given market uncertainty - and we've made that clear."
The reduction in output is being made by members of the Opec+ oil producers. The group accounts for about 40% of world oil output.
Saudi Arabia is reducing output by 500,000 barrels per day and Iraq by 211,000. The UAE, Kuwait, Algeria and Oman are also making cuts.
A Saudi energy ministry official said the move was "a precautionary measure aimed at supporting the stability of the oil market".
Nathan Piper, an independent oil analyst, told the BBC the move by Opec+ appeared to be an attempt to keep the oil price above $80 a barrel in the medium term, given that demand could be hit by a weakening global economy.
Dan Pickering, co-founder of Houston-based investment firm Pickering Energy Partners, said: “It’s a meaningful surprise. There was no chatter about this pre-meeting which there usually is.
Less supply
“We’ll have less supply in the market, a market that was not expecting it. We’ll probably get a $10 move in crude.”
Oil demand had been predicted to rise this year as China’s economy re-opens, boosting industry and aviation.
However, manufacturing data from China published on March 31 suggested the pace of growth in its factories is starting to slow amid weaker global demand.
Oil prices fell to 15-month lows in mid-March amid jitters over the global economy, after the collapse of two US lenders and the rescue of Credit Suisse by rival UBS.
Amrita Sen, director of energy consultancy Energy Aspects, said: “Opec is taking pre-emptive steps in case of any possible demand reduction.”
Andy Lipow, president at Lipow Oil Associates, told the Telegraph: “The moral of the story is that Opec+ is monitoring the oil market on a daily basis and is more than willing to take pre-emptive action to support prices.”