* OPEC, other producers extend production cut to March 2018
Oil fell 5 pct in previous session, squeeze overdone - ABN Amro
* OPEC-led cuts will play into hands of U.S. shale drillers (Updates throughout, changes dateline from SINGAPORE)
By Karolin Schaps
LONDON, May 26 (Reuters) - Oil prices edged higher on Friday as some investors were tempted back to a market that tumbled five percent in the previous session on disappointment that an OPEC-led decision to extend current production curbs did not go deeper.
At Thursday's meeting in Vienna, the Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018. The initial agreement would have expired next month.
Producers are confident of this plan bringing down crude oil stocks to their five-year average of 2.7 billion barrels but oil investors had hoped for a last-minute agreement on more far-reaching action.
"The problem is that investors look at impact today, while OPEC focuses on reaching stability in the coming 6-9 months, so the long squeeze yesterday was overdone a bit," said Hans van Cleef, senior energy economist at ABN Amro.
Clawing back some of Thursday's losses, global benchmark Brent futures were up 28 cents at $51.74 a barrel at 0837 GMT.
U.S. West Texas Intermediate (WTI) crude futures remained below $50, at $49.11, though up 21 cents from their last close.
"The front of the curve declined the most, which at least for now implies that the market doesn't quite believe that a tightening and/or backwardation is really coming," said analysts at JBC Energy.
Concerns remain that OPEC-led production cuts will support a further rise in output from the United States, where producers can operate at much lower costs.
Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps U.S. onshore drillers make plans" to further raise their production.
U.S. oil production <C-OUT-T-EIA> has already risen by 10 percent since mid-2016 to over 9.3 million bpd, close to the output of top producers Russia and Saudi Arabia.
With U.S. output rising steadily and OPEC and its allies potentially ramping up production in 2018 to regain lost market share, many traders, including Goldman Sachs, already expect another price slump.
(Additional reporting by Henning Gloystein, Gavin Maguire and Mark Tay in Singapore; Edited by David Evans)