NafteEmroz/Investing.com - Oil prices traded slightly higher on Monday in Asia amid tightening supply caused by U.S. sanctions on Venezuela and hopes that U.S. and China will soon make progress in reaching a trade deal.

Crude Oil WTI Futures for March were up 0.20% to $55.37 a barrel as of 11:27 PM ET (04:27 GMT) after dropping to $55.07 earlier in the day. WTI had its strongest closing since Nov. 19 in the last session.

Brent Oil Futures, the benchmark for oil prices outside the U.S., rose 0.06% to $62.88 a barrel.

Tightened supply due to the U.S. sanctions on Venezuelan exports placed last week was considered to be supporting oil prices since last week.

The sanctions against state-owned oil firm Petroleos de Venezuela (PDVSA) effectively halts the flow of Venezuelan crude, and were followed by a notice from the U.S. Treasury Department saying that non-U.S. entities buying oil or petroleum products from the PDVSA in deals that involve the U.S. financial system, brokers or people must be wound down by April 28.

“Crude oil prices (had) surged higher as recent supply side-issues were joined with easing concerns of weaker economic growth,” ANZ Bank said in a research note that was cited by Reuters.

Oil supply from the Organization of the Petroleum Exporting Countries in January also took the deepest fall in two years despite sluggish production declines from Russia, according to a Reuters survey.

On the Sino-U.S. trade relations front, U.S. President Donald Trump said he would meet with Chinese President Xi Jinping to negotiate a trade deal before the tariff hike on $200 billion worth of Chinese goods kicks in on March 1. However, it is still unknown if an agreement can come out of these meetings.

“While the United States and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress,” said ANZ.