Oil Rises 2 pct after Saudi and Russia Back Longer Supply Cut

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"We will have to see how much demand picks up as increasing USA output continues to cap crude prices from rising, despite the efforts made by OPEC and its allies to reduce production", Will Yun, a Seoul-based commodities analyst at Hyundai Futures Corp., said by phone.

"The two ministers agreed to do whatever it takes to achieve the desired goal of stabilizing the market and reducing commercial oil inventories to their 5 year average level, as well as to underscore the determination of oil producers to ensure market stability", the joint statement said.

EOG Resources (EOG) said it could increase production by 18% while operating within cash flow if oil averages $47 per barrel this year.

Libya is increasing oil output with less than two weeks to go before the world's biggest exporters decide whether to extend production cuts to clear a supply glut, Bloomberg reported.

"We've come to the conclusion that the agreement needs to be extended".

Oil futures jumped as the ministers spoke. US shale oil production is on the rise, but the primary reasons for the builds were increased imports and refiners taking less crude oil during their annual maintenance period.

The OPEC member with Africa's largest crude reserves is pumping more than 814,000 barrels a day, thanks partly to rising output from two fields that re-started last month, Jadalla Alaokali, a board member at the National Oil Corp., said Sunday by phone, Bloombeg indicated. That is longer than the optional six-month extension specified in the deal.Global benchmark Brent crude was up $1.41 at $52.25 a barrel by 11:28 Eastern (1528 GMT), having touched $52.63, the highest since April 21.

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The dollar rose 0.1 percent to 113.39 yen, failing to make up most of Friday's 0.5 percent loss. But American crude inventories are showing some signs of shrinking, falling for the past five weeks from record levels at the end of March.

"Preliminary consultations show that everybody is committed" to the output agreement and no country is willing to quit, said Novak.

Some analysts doubted that the producers would stick to a prolonged curb. Check. The oil market just got bullish and that's left OPEC with little room for maneuver when it meets in Vienna next week.

Undermining efforts by OPEC and Russian Federation has been the United States, which did not participate in the agreement to cut supplies.

Russian President Vladimir Putin said extending output cuts for a further nine months was the right thing to do: "We support the proposal".

"On the one hand, this is good news because we are looking at a situation where we would not have to worry oil production and its baggage for some time", said Naeem Aslam, chief market analyst at Think Markets UK Ltd. Nigeria's 200,000 barrel-a-day Forcados oil pipeline is ready to export again after being shut down nearly continuously since February 2016.

Some analysts said that United States production could still threaten to disrupt the market balance unless the cuts were deepened.

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