The agreement between Russian Federation and Saudi Arabia - two of the world's biggest oil producers - helped strengthen relations between the two countries, which previously had a relatively frosty relationship. U.S. West Texas Intermediate (WTI) crude futures rose 11 cents to $53.37 a barrel.
Stock markets rose on Monday after a deal between the United States and Mexico to combat illegal migration from Central America late last week removed the threat of US tariffs on goods imported from Mexico.
"The demand outlook is central to the oil market these days", said John Kilduff, an analyst at Again Capital LLC.
Earlier, Russian Finance Minister Anton Siluanov said that the price of oil could drop to $30 a barrel if OPEC and its partners fail to agree on extending the production cuts that now expire at the end of June.
Addressing to Saudi energy minister's comment on OPEC+ output cut, an analyst at futures brokerage at FXTM, Han Tan said, "Brent futures continue rising. after the Saudi Arabian Energy Minister expressed confidence that OPEC+ producers will prolong their output cuts program through the second half of 2019".
The Organization of the Petroleum Exporting Countries and some allies including Russian Federation, known collectively as OPEC+, have withheld supplies since the start of the year to prop up prices. The deal is due to expire this month.
Russian Federation on Monday said it might support an extension of supply cuts that have been in place since January, warning oil prices could fall as low as $30 per barrel if producers supply too much crude. Novak said he could not rule out a drop in oil prices to $30 per barrel if the global deal was not extended.
The dramatic decline in oil prices, caused by rising U.S. stockpiles, lukewarm demand growth as well as fears of a USA recession had raised the possibility of Opec+ agreeing to an extension well into the second half of the year.
In the United States, crude production has surged, rising to a weekly record at 12.4 million barrels per day, while crude stockpiles have climbed close to two-year highs, according to the Energy Information Administration's data last week.
Oil prices steadied on Tuesday, weighed by concerns about a global economic slowdown that could dent crude demand, but supported by expectations that OPEC and its allies will extend their supply curbs. This article is strictly for informational purposes only.