Investing.com - Oil prices rallied in European trading on Monday, rising to the highest level in around two weeks after Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018 in a bid to erode a global crude glut.
In a joint statement that followed an earlier meeting, Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak said they had agreed to prolong an existing deal by another nine months until March 2018.
The ministers pledged "to do whatever it takes" to reduce global inventories to their five-year average and expressed optimism they will secure support from producers beyond those in the current deal, the statement said.
The U.S. West Texas Intermediate crude June contract tacked on 97 cents, or around 2%, to $48.81 a barrel by 3:20AM ET (07:20GMT), after rising to $48.88 earlier, the most since May 2.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose 99 cents to $51.82 a barrel.
Oil futures settled nearly flat on Friday, but still registered their first weekly gain in a month on the likelihood that key crude producers will extend output cuts beyond an agreed-on June deadline.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Crude sank to a five-month low earlier this month, rattled by concern over increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.
U.S. drillers last week added rigs for the 17th week in a row, data from energy services company Baker Hughes showed on Friday.
The U.S. rig count rose by 9 to 712, extending an 11-month drilling recovery to the highest level since August 2015, implying that further gains in domestic production are ahead.
Elsewhere on Nymex, gasoline futures for June climbed 2.2 cents, or roughly 1.4%, to $1.602 a gallon, while June heating oil added 2.6 cents to $1.519 a gallon.
Natural gas futures for June delivery dipped 0.2 cents to $3.401 per million British thermal units.