A report published Tuesday by the International Energy Agency found the global market for oil was "almost balanced".
The contracts closed 98 cents and $1.01 higher Monday, buoyed by Saudi Arabia and Russian Federation saying they were willing to do "whatever it takes" to bring global oil inventories back to their fiveyear range. Nonetheless, "stocks at the end of 2017 might not have fallen to the five-year average, suggesting that much work remains to be done in the second half".
While the curbs by producers are working, "we are not where we want to be" in bringing global inventories down "gently" below the five-year average, Al-Falih said.
Crude oil prices moved below $50 per barrel in late April on signs the designed balance envisioned by production cuts was slow to materialize. The cuts, agreed at the end of past year, involved nations in the Organization of the Petroleum Exporting Countries and some non-OPEC countries like Russian Federation.
Since US is not a party to the agreement to cut supplies, US shale producers are free to hike production as prices rise, which in turn could undermine the unified effort to prop up the market.
Oil halted gains near $48/bbl after US rigs targeting crude rose a 17th week, countering a report that OPEC and other major producers reached an initial agreement to extend output cuts.
"Russia and Saudi Arabia may be trying to coordinate a push to keep access to their most important market (China) in their favor and encourage Chinese importers to displace alternative cargoes", said Bell.
The IEA boosted its outlook for non-OPEC production growth this year by about 100,000 barrels a day to 600,000 a day.
Opec members agreed in November to cut 1.2 million barrels per day (bpd) of oil production.
According to Novak, extending the agreement exactly for 9 months will help with a longer-term market forecast and give a greater certainty in terms of market recovery.
It seems likely that the current deal amongst Opec nations and some other key oil producing nations will be extended. Novak declined to identify the nations. "We have, before coming to this announcement today, reached out to many of our colleagues within and outside OPEC, and I think there is general consensus that this is the right approach". Their clout in oil policy is seen as ensuring that other producers who have so far participated in the cuts will also join in the extension.
President Nicolas Maduro also weighed in, accusing the U.S. of "leading" the "destabilisation of Venezuela". "Enough meddling. Share with Us - We'd love to hear eyewitness accounts, the history behind an article, and smart, constructive criticism.
The initiative - a modern Silk Road of trade, investment and infrastructure development - is China's biggest foreign initiative to date.