Global benchmark Brent crude was up $1.41 at $52.25 a barrel by 3.28pm GMT, having touched $52.63, the highest since April 21. "Saudi Arabia seems very determined to push oil prices higher by making this joint statement now", said Mr Oystein Berentsen, managing director of oil trading company Strong Petroleum.
USA crude stockpiles are forecast to have declined by 2.75 million barrels to 519.8 million barrels in the week ended May 12th, according to a Bloomberg survey of analysts. U.S. West Texas Intermediate (WTI) crude futures were at $49.10, up 25 cents, or 0.51 percent from their last settlement.
U.S. bank Goldman Sachs said the deal "will likely further extend the oil price rebound. although the rally so far. has remained modest compared to the move that occurred previous year when the Opec cuts were first announced".
In early December 2016, OPEC countries and eleven non-OPEC nations agreed to slash the total oil production by 1.8 mln barrels per day in the first half of this year in order to cut global oil stocks to the latest five-year average.
Yesterday, Reuters reported that Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak said they would do whatever it takes to reduce the inventory overhang. The meeting to decide on the output cut extension has been set for May 25.
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"As we have seen over the past six months, rising USA production and record inventories have kept upside limited and a nine-month extension at this stage is unlikely to break that", he said.
The oil production cut agreement was signed by all the oil producing countries to maintain its price in the market. The Iranian position is less predictable, however, as it was the only Opec member allowed to increase its output under the supply cut deal and holds presidential elections on Friday.
May 16 Venezuela on Tuesday said it supported a nine-month extension of an agreement between OPEC and non-OPEC countries to limit crude production, hoping to achieve a "stabilization" of the oil market.
"The ministry stressed that the agreement on oil output cuts had a positive impact on oil prices, adding that additional steps to ensure market stability in the long term were still needed as global commercial oil reserves were above their five-year average".
United States oil output witnessed a steep growth in the last one year by almost 10% since mid-last year and touched 9.3 million bpd production.