Oil halted gains near $48/bbl after USA rigs targeting crude rose a 17th week, countering a report that OPEC and other major producers reached an initial agreement to extend output cuts.
Extending the curbs at already agreed-upon volumes is needed to reach the goal of reducing global inventories to the five-year average, the energy ministers of the world's biggest oil producers said in a joint press conference in Beijing. The country's oil minister said last week Iraq would support a six-month extension.
Goldman Sachs said output would increase from OPEC members that were exempt from the cuts. Beyond the element of surprise from today's announcement, and the need for broader ratification by other participants, we believe that such a moderate oil price response is consistent with.
Between them, Russian Federation and Saudi Arabia produce approximately 20% of the oil consumed by the world every day - about 20 million barrels.
Russian Federation and Saudi Arabia, the largest of the 24 nations that agreed to a deal to cut production for six months starting in January, are reaffirming their commitment to the deal amid growing doubts about its effectiveness.
The overall outlook for the non-OPEC countries, eleven of which were voluntarily cutting production to support OPEC, pointed to faster growth than previously anticipated in 2017, the IEA said.
Oil futures were up in North American trading on Tuesday, with prices headed closer to daily highs reached in the prior session, as investors looked ahead to weekly data from the USA on stockpiles of crude and refined products.
OPEC wants to reduce global oil inventories to their five-year average but so far has struggled to do so.
"There are no fast solutions to end this situation, and the only solution possible is to let oil prices work their way" to clear the oversupply, Al-Husseini said from the Saudi city of Dhahran.
The supply cut has helped prices recover from a low of $26 a barrel early previous year. Opec is due to meet with fellow producers on May 25 to decide on the extension. USA oil output has jumped by more than 10 per cent since mid-2016 to over 9.3 million bpd.
Oil prices spiked higher amid growing speculation that last year's production cut will be extended into 2018.
It has been concerned with the increase in United States shale gas production, and so increased its oil output to drive down prices in a bid to make shale gas exploration economically unattractive.