Crude prices rose broadly on Monday on expectations OPEC-led production cuts would be extended beyond March although rising Iraqi exports put a lid on prices.
Benchmark Brent crude futures gained 0.7 percent to trade at $60.84 per barrel, close to their highest since July 2015. They are over 37 percent above the 2017 lows marked in June.
U.S. West Texas Intermediate (WTI) crude futures settled 25 cents higher, or 0.5 percent, at $54.15 a barrel. WTI also reached an eight-month high, according to Dow Jones.
"The latest uptick can to a certain extent be attributed to further Saudi and Russian support for extending the supply cut," consultancy JBC Energy said.
The Organization of the Petroleum Exporting Countries plus Russia and nine other producers agreed to cut 1.8 million barrels per day (bpd) from January 2016 to clear a supply glut.
The pact, already renewed once, now runs to March 2018, but Saudi Arabia and Russia, who are leading the effort, have voiced support to for a further extension.
OPEC Secretary General Mohammad Barkindo said Russian-Saudi backing for an extension cleared the fog before the group's meeting in Vienna on Nov. 30.
Saudi Crown Prince Mohammad bin Salman repeated the kingdom's support for extending the deal at the weekend.
JP Morgan raised its 2018 Brent and WTI forecasts by $11 and $11.40 to $58 and $54.63 per barrel, respectively.
The bank said the revision reflects OPEC and non-OPEC cuts and higher than expected demand growth tightening the oil market.
However, traders said a 900,000 bpd export capacity increase from Iraq's southern ports to 4.6 million bpd had prevented Brent rising further.
Also helping to keep a lid on prices, U.S. production is up by almost 13 percent since mid-2016, resulting in a steep WTI discount of $6.50 per barrel against Brent, making U.S. crude exports attractive.
Nevertheless, hedge funds and other money managers raised their bullish wagers on U.S. crude futures and options in the week to Oct. 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
The speculator group raised its combined futures and options position in New York and London by 15,041 contracts to 280,634 during the period.
Some analysts added a note of caution.
"We note that both contracts' (Brent and WTI) relative strength indices (RSI) are both approaching overbought levels. This may imply that crude has risen enough in the short term and some consolidation is required," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.