West Texas Intermediate crude oil was rising 0.7% early Thursday to $51.21 a barrel, while Brent crude, the global benchmark, was up 0.8% to $53.37 a barrel.
Oil producing countries which participate alongside member-states of the Organization of the Petroleum Exporting Countries (OPEC) in the oil production cut deal, are gradually enforcing their reduction obligations under the agreement, Kuwaiti Oil Minister Issam Abdulmohsen Almarzooq said Thursday.
The oil price fell from just over $55 a barrel earlier this week to lows of $52.66 on Wednesday evening as USA data reignited fears that the resurgence of shale production could have a bigger impact on global production than first thought.
"We have a noticeable increase in compliance from non-OPEC which shows the importance of extending the agreement", Marzouq told an industry event with other Gulf oil ministers including Saudi Arabia's energy minister Khalid al-Falih in Abu Dhabi. He said a preliminary agreement to extend the cuts had been reached, but it still needed final sign off from some OPEC members. The global economy remains weak as well.
The Organisation of Petroleum Exporting Countries has been "hoisted by its own petard" by agreeing in principle to reduce production last September while allowing members to keep boosting sales until the deal took effect on January 1, Citigroup Inc. said.
"The market has already taken the output cut plan seriously".
OPEC is meeting on May 25 to discuss a potential extension of the cuts.
"Consensus is building, but it is not done yet", Falih said, saying he was still consulting with fellow oil ministers.
'It is important that we agree to extend the agreement, ' he told the forum. "We are talking to all countries".
Prices rose as much as 1 percent in London, paring Wednesday's 3.6 percent loss.