Oil prices experienced a rally on Monday following the announcement of supply cuts by major exporters Saudi Arabia and Russia for the month of August. This development overshadowed concerns about a potential global economic slowdown and the possibility of further increases in US interest rates.

Saudi Arabia, through its state news agency, stated that it would extend its voluntary cut of one million barrels per day (bpd) for an additional month, covering August.

Deputy Prime Minister Alexander Novak of Russia also revealed that the country would reduce its oil exports by 500,000 bpd in August. This move further tightened global supplies.

As a result of these announcements, Brent crude futures climbed by $1.04 to reach $76.45 per barrel at 0942 GMT. This followed a 0.8% gain on Friday. Meanwhile, US West Texas Intermediate crude saw an increase of 97 cents, reaching $71.61 per barrel. It had gained 1.1% in the previous session.

Tamas Varga, an analyst at PVM, stated, "Investors are turning upbeat as the second half of the year kicks off; they expect tighter oil balance and buoyant equities also suggest that recession will be avoided, albeit probably narrowly."

Earlier in the session, oil prices had fallen due to concerns over the eurozone's manufacturing activity, which contracted faster than initially anticipated in June. The European Central Bank's persistent policy tightening had put pressure on finances, contributing to these worries.

On Friday, fears of a further economic slowdown affecting fuel demand intensified as US inflation continued to surpass the central bank's 2% target. This fueled expectations that the bank would raise interest rates once again.