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UPDATE 8-Oil rises 2 pct as potential OPEC deal trumps U.S. exports

* Saudi Arabia, Russia expected to agree extended production cut

* Libya's Sharara oilfield resumes production

* Record U.S. crude oil exports weigh on market (Updates throughout, changes byline, dateline previously LONDON)

NEW YORK, Oct 5 (Reuters) - Oil prices rose more than 2 percent on Thursday as signs Saudi Arabia and Russia would limit production through next year outweighed record U.S. exports and the return of production at a major Libyan oilfield.

"Bullish comments from the Russian and Saudi Energy ministers are helping arrest the recent decline in oil prices," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.

Brent was up $1.19 cents at $56.99 a barrel by 12:25 p.m. EDT (1625 GMT). U.S. crude rose 86 cents to $50.84.

Both benchmarks have fallen more than 5 percent over the last week as investors booked profits after almost three months of gains.

"I think the market is trying to stabilize," said Gene McGillian, director of market research at Tradition Energy. Potential demand decreases and pressure from production increases in the U.S., Libya and Nigeria could all threaten the rally, he cautioned.

Russian President Vladimir Putin said this week that a pledge by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018.

Russian Energy Minister Alexander Novak said on Thursday that Moscow would support new countries joining the agreement to restrict oil supply.

The statement came as Saudi Arabia's King Salman visited Moscow.

"Putin and Salman will most likely reach, but not announce, an agreement to extend the OPEC/non-OPEC production deal, though with a commitment to taper the cuts," said Eurasia Group.

The pact on cutting output by about 1.8 million barrels per day (bpd) took effect in January this year.

Despite this, other factors weighed on oil prices, including the return to production of Libya's Sharara oilfield after an armed brigade forced a two-day shutdown.

Higher U.S. oil exports also dampened market sentiment.

U.S. crude oil exports jumped to 1.98 million bpd last week, surpassing the 1.5 million bpd record set the previous week, the Energy Information Administration said.

The increase followed a widening of the discount for U.S. crude against Brent <WTCLc1-LCOc1>, making U.S. oil attractive on world markets.

(Additional reporting by Henning Gloystein in Singapore and Christopher Johnson in London; Editing by Marguerita Choy and Susan Fenton)