OPEC crude production rises in April - IEA

"[But] compliance needs to remain high, and long-term oil prices need to remain low to prevent shale producers from ramping up investment significantly more".

Extending the cuts at already agreed-upon volumes is needed to reach the goal of trimming global stockpiles to the five-year average, Kuwait's Oil Minister Issam Almarzooq said in an emailed statement on Tuesday.

Analysts including Goldman Sachs have said the global oil market is re-balancing, and the International Energy Agency predicts demand will significantly exceed production if OPEC and its partners extend their cuts into the second half of the year.

The statement, made on the sidelines of an economic summit in China, is an admission that the efforts of the world's biggest exporters to balance the world oil market by holding back 1.8 million barrels a day of crude have failed to end the current glut as quickly as they hoped.

"Saudi Arabia and Russian Federation are clearly working closely together".

Kuwait today backed a call by top oil producers Saudi Arabia and Russian Federation to extend a deal on crude production cuts for nine more months.

At the same time, Brent crude oil futures were up 0.41% at US$52.03 per barrel while the West Texas Intermediate grew 0.41% to US$49.05 per barrel.

Under the current agreement that started on January 1, the 13-country OPEC and other producers pledged to cut output by nearly 1.8 million barrels per day in the first half of the year.

It has been suggested that USA output, which is not included in the deal, might scupper the agreement, however, the current weak oil price makes exploitation of U.S. shale oil deposits marginal, so the United States also has a vested interest in seeing the oil price rise from a producer's perspective, but this is tempered as the United States is the largest market for oil. Total volume traded was nearly double the 100-day average.

The two countries produce 20 million barrels of crude oil a day - about one-fifth of global consumption - and other oil-producing nations are expected to follow their lead over cuts. US crude was up 4 cents, or 0.1 percent, at $48.89 per barrel.Both benchmarks have risen more than $5 since hitting five-month lows 11 days ago.

US drilling activity last week rose to its highest in two years, while USA production has jumped more than 10 percent since its mid-2016 trough.

"That said, we are skeptical about Russia's willingness to actively participate in any extended cuts".

"I think it will be 3-5 new countries", Novak said.

  • Zachary Reyes