The announcement of Saudi-Russian agreement to extend the "OPEC plus" agreement in addition to the US-China trade arm agreement led to the rise in oil prices more than five percent on Monday.
This came ahead of OPEC’s meeting this week, in which the decision to reduce supplies is expected to be taken.
US light crude oil ended Tuesday's session at $2.92, or 5.7 percent, higher at $53.85 before falling to $53 at around 12:40 GMT.
Brent crude oil rose $3.14 or 5.3 percent to a high of $62.60 per barrel.
Notably, Russian President Vladimir Putin announced a Saudi-Russian consensus to extend the OPEC+ deal, following his meeting with Saudi Crown Prince Mohammed bin Salman on the sidelines of G20 Summit n Argentina.
Although they did not yet reach a final decision on volumes, experts consider this announcement enough to support oil markets and restore confidence to them.
In this context, US President Donald Trump and Chinese President Xi Jinping struck a temporary 90-day truce to deescalate trade tensions between the world’s two largest economies, which have raised fears of an economic slowdown.
Crude oil is not among the list of products facing import duties, but traders said the positive sentiment of the truce also moved crude markets.
Markets didn’t register significant negative moves as a result of Qatar's announcement on Monday of its intention to withdraw from OPEC early 2019.
It said this was due to the small volume of production both at the level of the organization or the world as its production does not exceed 600,000 barrels per day.
Oil also was supported after Alberta's announcement in Canada that it would force producers to cut crude output by 8.7 percent or 325,000 bpd to counter bottlenecks that could lead to an increase in inventories.
Most of Alberta’s oil is usually exported to the United States.
In Vienna, Omani Energy Minister Mohammed bin Hamad al-Rumhy said he believed there was a consensus among OPEC oil producers that oil output should be cut.
Asked if he thinks there is a consensus for a cut, he told reporters: “I think so, yes. We enjoyed the benefits of cuts.”
He added that Oman was ready to join any cuts decided by OPEC and its allies next week. “Of course, we have always been a champion of cutting.”
