July is on track to be the strongest month of the year for oil prices, as crude benchmarks headed to 2-month highs on Monday (31 July), on the prospect of US sanctions on Venezuela and another meeting between selected producers.

At 3:37pm BST, the Brent front-month futures contract was marginally down 0.44% or 23 cents to $52.29 per barrel, having rallied for much of the Asian and European session to as high as $52.92.

Likewise, the West Texas Intermediate remained within touching distance of the psychological $50-level, having briefly traded above the level, before falling back to $49.34, down 0.64% or 37 cents as traders booked profits.

The uptick follows a slower rig addition rate stateside (up 10 rigs) and news that the US is considering imposing sanctions on Opec member Venezuela's oil sector in response to Sunday's election of a constitutional super-body, which President Donald Trump's administration has denounced as a "sham" vote.

Meanwhile, Opec and non-Opec oil producers are scheduled to meet again on 7-8 August in Abu Dhabi to assess how compliance with 1.8 million barrels per day (bpd) in production cuts - up to March 2018 - can be improved further.

Michael Wittner, head of oil research at Societe Generale, said the routine Opec/non-Opec meeting on 24 July in St. Petersburg, which was meant to review progress of the production cut agreement, had limited concrete results but set the market tone.

"With fairly modest expectations, the well-managed meeting did appear to support market sentiment. There was no announcement of a steeper production cut, although Saudi Arabia said it would cut exports to 6.6 million bpd in August versus 6.9 million bpd in May (last actual)."

Mihir Kapadia, chief executive officer of Sun Global Investments, said there were signs the current supply and demand situation is healthy and the market is tightening.

"However, this may well turn out to be short-lived as prices above $50 have tended to encourage more US oil drilling, and thus adding to the global supply glut."