Looming over the OPEC-led cuts, however, is a surge in U.S. oil supply, driven by a steep rise in onshore shale oil drilling and production.
Oil held gains after its longest rally in nearly 1.5 years.
Brent crude futures LCOc1 rose $1.39 a barrel, or 2.4 percent, to $58.72.
USA crude inventories at Cushing, Oklahoma, the delivery point for US crude futures, fell by 565,000 barrels from last Tuesday to Friday, traders said, citing data from market intelligence firm Genscape.
Crude's taking a respite after closing the worst year since 2015 on fears of oversupply and weakening global growth.
Woman dies after being found inside Toronto clothing donation bin
The municipality of West Vancouver has already sealed a number of bins as they look for safer alternatives to the containers. A Burnaby man was found in a donation bin just a day after the city announced its plans to remove them from city streets.
The rise came as China and the U.S. sit down together in Beijing today.
"If compliance by OPEC and the allied non-OPEC countries is similarly high as in the agreement two years ago, the oil market is likely to be rebalanced during the first half year", Commerzbank wrote in a note on Monday.
The oil prices in 2018 saw the highest peak till October before giving up and depleting to the lowest value in the past year. In Tuesday dealings, February West Texas Intermediate crude CLG9, +1.73% was up $1.36, or 2.8%, at $49.88 a barrel on the New York Mercantile Exchange. Traders are also expecting that the decision of OPEC and some non-OPEC members including Russian Federation to reduce crude output by 1.2 million barrels per day from this month will significantly alter supply - demand imbalance in the market.
Investor confidence grew as trade talks showed signs of progress.
Specifically, net-long positions in Brent (the difference between bets on a price increase and wagers on a drop) fell by 6.1 percent in the week ended January 1, according to data from ICE Futures Europe exchange. The Saudi budget does not breakeven unless Brent crude prices average in the mid-$80s per barrel, vastly higher than today's spot price. "The Fed's easier stance and Opec's commitment to cut production as well as expectations that inventories should drop are lending a hand to this positive investor sentiment".
Data released by the Energy Information Administration on Friday showed crude inventories in the US rose by 7,000 barrels in the week to December 28, beating expectations for a drop of more than 3 million barrels. Oil refiners in the world's top crude-importing region are racing against the clock to restart and ramp-up purchases from Iran before U.S. President Donald Trump has a chance to change his mind.