Oil prices have increased amid expectations that the Organization of the Petroleum Exporting Countries (OPEC) led production cut can extend for the remainder of the year and even continue into 2018. 

However, the improvement in oil prices was restricted by consistent increase in US drilling.

Brent crude futures gained 38 cents and traded at $49.48 per barrel, while the US West Texas Intermediate (WTI) crude futures gained 30 cents and traded at $46.52 a barrel, reported Reuters. 

Earlier, Saudi Energy, Industry and Mineral Resources Minister Khalid Al-Falih stated that the production cut deal may be extended beyond June as the oil market has already started rebalancing. 

"I am rather confident the agreement will be extended into the second half of the year and possibly beyond."

Al-Falih was quoted by the news agency as saying: “Based on the consultations I have had with participating members, I am rather confident the agreement will be extended into the second half of the year and possibly beyond.”

OPEC and other key oil exporter have agreed to reduce output by 1.8 million barrels a day for the first six months of the year to revive oil prices.

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By GlobalData

Last week, oil prices suffered huge losses due to current ongoing oversupply globally, including the rise in US production.

OPEC is scheduled to meet on 25 May 2017 to decide about the extension of the current ongoing deal.

Goldman Sachs stated that since May last year, the US has added 387 oil rigs.