The oil price surged to one-month high at $47.31 a barrel on New York Mercantile Exchange (NYME). Oil futures reached $48.09 indicating its highest since 31 July. The rebound in oil prices was mainly due to two factors.

The willingness of Organization of Petroleum Exporting Countries (OPEC), which accounts for 40 percent of global oil production, to talk to other oil producers to get a fair price has boosted the market confidence.

The US energy production forecast also lifted oil price as it cut down production projection.

The futures contract gained 27 percent in just last three sessions and this is the biggest gain since August 1990. Volume increased by 69 percent taking it to above the 100-day average. 

The US Energy Information Administration (EIA) has reduced its projection on production by 130,000 barrels per day for the first five months of the year. OPEC said in its latest bulletin that the efforts to bring oil price to a fair level for oil producers need to be done on an equal level playing field.

The global energy market reacted positively to the latest two developments. The EIA lowering forecast and OPEC coming forward to hold talks with oil producers have turned out to be a major push to oil prices.

West Texas Intermediate (WTI) and Brent benchmarks rose over 20 percent since 24 August. The steep rise indicates that bullishness in the oil price, observe some trade analysts. 

Oil price dropped to six-year low last week and later started recovering on the renewed hopes that US shale boom is losing out fast. Adding to this, the glut in oil production will also set to ease creating more demand for it.

On the other hand, the volatility in oil price is alarmingly going high as it already touched its five-month high. 

Brent for October settlement on ICE Futures Europe Exchange rose $4.10 to $54.15 indicating its highest since 24 July. 

The oil price rise will impact gasoline in the US. Generally gasoline prices ease after the end of summer driving season in the US. The refinery maintenance activity also results in limited supply. It's expected that gasoline prices are expected to rise in the coming days. 

The oil production levels being maintained by Saudi Arabia are crucial in setting the oil price ata fair level. Analysts say that Saudi Arabia makes a profit as long as the oil price is more than $5 a barrel. Saudi Arabia is planning to pump in more production to increase pressure on oil-producing countries such as America, Venezuela, and Canada.

US EIA has cut down oil production estimate of June by 100,000 barrels per day. Many producers in the US have stopped the drilling activity owing to steep drop in oil prices.