On Friday Oil prices jumped more than 2 percent as Russia and the major Middle East producers in OPEC edged closer to an agreement to reduce output to try to drain inventories and support the market.
Benchmark Brent crude oil LCOc1 rose $1.80 a barrel to a high of $61.86 before easing back to trade around $61.50 by 1335 GMT. In early trade, Brent had fallen below $60 when it looked as if oil exporters might be unable to agree a deal.
U.S. light crude CLc1 rose $1.19 to a high of $52.68 a barrel.
Crude prices fell almost 3 percent on Thursday after the Organization of the Petroleum Exporting Countries ended a meeting in Vienna with only a tentative deal to tackle weak oil prices. Talks with other producers were being held on Friday.
Oil prices have plunged 30 percent since October as supply has surged and global demand growth has weakened.
Iran appeared on Friday to be the main obstacle to an OPEC deal to cut output. OPEC sources said the group’s de facto leader Saudi Arabia was opposed to exemptions in the deal demanded by Iran, which is under U.S. sanctions.
But an OPEC source said that Iran had given a green light for OPEC to reduce its overall production by around 0.8 million barrels per day (bpd) from 2019. OPEC wants non-OPEC producers to contribute an additional 0.4 million bpd of cuts, the source said.
OPEC is seeking support from non-OPEC Russia for supply cuts. Russian Energy Minister Alexander Novak returned to Vienna on Friday after discussing the issue with President Vladimir Putin.
A Russian Energy Ministry source said Moscow was ready to contribute a cut of around 200,000 bpd.
Analysts said a big cut would be needed to reverse recent price falls and Russia’s contribution would be vital.
“Reversing the overwhelmingly bearish price sentiment will likely require a credible and cohesive message from the OPEC meeting,” U.S. investment bank Jefferies said, adding that 1 million bpd would not be enough.
Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by 3.3 million bpd since the end of 2017 to 56.38 million bpd, meeting almost 60 percent of global consumption.
The surge is mainly due to soaring U.S. oil production C-OUT-T-EIA, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the biggest producer of world.