Oil jumped about 2 percent on Monday, after Saudi Arabia and Russia said that supply cuts need to last into 2018, a step towards extending an OPEC-led deal to support prices for longer than first agreed.
Energy ministers from the world's two top producers said that supply cuts should be prolonged for nine months, until March 2018. That is longer than the optional six-month extension specified in the deal.
U.S. crude settled $1.01, or 2.1 percent, higher at $48.85 a barrel, off a session peak of $49.66. Brent crude, the global benchmark, rose 95 cents, or 1.9 percent, to $51.79 a barrel by 2:39 p.m ET (1639 GMT), after earlier rising to a three-week high of $52.63.
Oil traders were surprised by the strong wording of the announcement, although it remained to be seen whether all countries participating in the deal would agree with the Saudi-Russian stance. Some analysts doubted producers would stick to a prolonged curb.
"Extending the cuts until March 2018 would take account of the fact that demand in the first quarter of a year is lowest for seasonal reasons," said Carsten Fritsch, analyst at Commerzbank.
"That said, we are skeptical about Russia's willingness to actively participate in any extended cuts."