Oil prices surged on Monday morning following a joint commitment on Sunday from Saudi Arabia's and Russia's energy ministers to extend the existing oil production cut agreement until March 2018.
By 1:20 p.m. London time, the U.S. domestic benchmark West Texas Intermediate (WTI) was trading 3.6 percent higher at $49.55 while the international Brent price had gained around 3.3 percent to trade at $52.53.
However, analysts cautioned that relentless pressure from U.S. shale oil producers mean that any resurgence is likely to be tightly contained and short-lived.
Oil is going to range trade between $40 and $55 per barrel while the marginal cost of production in the U.S. remains in the middle of that spectrum at around $50 per barrel, according to James Butterfill, Head of Research and Investment Strategy at ETF Securities.
"Every time oil tests that level…you see clients trading around it," Butterfill observed, speaking on CNBC's Squawk Box on Monday.
"Every time it goes below that $50 a barrel level, it's a buying opportunity and roughly when it hits about $50, we see a lot of selling at that point," he added.
The past week has seen a pick-up in flows with Butterfill noting that clients had bought around $130 million of crude oil in the past week with his firm, as part of year-to-date inflows to the asset class for his firm of around $340 million.
Analyst consensus now sees a cap on prices at around $60 according to Dean Turner, economist at UBS Wealth Management, also speaking on CNBC's Squawk Box on Monday.
"What we're seeing in current oil prices is probably sustainable in terms of where projections for the earnings stream are going," Turner estimated.