Saudi Arabia led suppliers to cut production two years ago to curb a glut, then reversed course in June on concerns that USA sanctions on Iran could create a shortage.
Prices, however, significantly pared much of their early Friday losses as speculation has grown over a potential production cut by major oil producers, ahead of next week's final meeting of the year for the Organization of the Petroleum Exporting Countries.
President Vladimir Putin said that Russian Federation and OPEC biggest producer, Saudi Arabia had agreed to renew a pact on oil production cuts, as crude prices slump on global markets. Although Moscow and Riyadh have yet to confirm any fresh cuts, the agreement by the Russian and Saudi leaders over the weekend opens the door for a deal at the OPEC meeting this week in Vienna.
On Friday, West Texas Intermediate crude for January delivery CLF9, -1.42% on the New York Mercantile Exchange fell 52 cents, or 1%, to settle at $50.93 a barrel after trading as low as $49.65. "But the details are now what matter - how much will be cut, from when, for how long and, crucially, from what baselines".
Trading action was also held in check ahead of weekend meetings of the Group of 20 in Argentina, where oil talks are expected take place on the sidelines, ahead of an official meeting on December 6 between OPEC and its allies.
IG Market Analyst, Kyle Rodday says the news post-OPEC meeting could be significant. "Canada's production cuts are adding to the bullish sentiment in the oil market, removing concerns of oversupply that has so far been dampening prices".
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Despite US sanction over Iranian oil, the OPEC output remains plentiful and the oil price have plunged 30% since early October and US oil reserve has reached a record high.
France's President Emmanuel Macron, who has faced intense protests against growing gasoline prices in his country, also called for cheaper oil at the G-20 summit.
International Brent crude oil futures were up $2.18 per barrel, or 3.7%, at $61.64 a barrel.
By the close of Friday's session, West Texas Intermediate crude for January delivery in NY ended down 1% at $US50.93 a barrel after trading as low as $US49.65. The contract rose 1.1 percent from last week.
The oil reserves in the US increased by 3.6 million barrels in the week to 23 November to 450,49 million barrels, according to the worldwide energy Agency. WTI was down 7 USA cents to settle at 51.56 dollars a barrel, while Brent dipped 0.27 dollar to close at 60.21 dollars a barrel. It ended November down around 22%. They also recommended a cut of around 1.3 million barrels a day from October levels.
Meanwhile, the number of active drilling rigs in the United States decreased by three to 1,076 in the week ending November 30.