Saudi Arabia's energy minister Khalid Al-Falih said on Monday oil markets were rebalancing after years of oversupply, but that he still expected the OPEC-led deal to cut output during the first half of the year to be extended.
"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", said Falih, Saudi Minister of Energy, Industry and Mineral Resources, during an industry event in Malaysia's capital Kuala Lumpur on Monday.
Saudi Arabia and Russian Federation signaled they could extend production cuts into 2018, doubling down on an effort to eliminate a supply surplus just as its impact on prices wanes.
This has put pressure on OPEC to extend the cut to cover all of 2017.
Oil capped a third weekly loss last week after dropping to levels last seen before the Organization of Petroleum Exporting Countries agreed in November to reduce production.
However, with hedge funds turning bearish and oil prices giving up most of their post-agreement gains last week, the need for a clearer signal has become urgent.More news: AAP govt removes Kapil Mishra as minister inducts 2 new faces
"Importing an average of 8.5 million barrels per day between January and April, China has overtaken the U.S.as the world's largest crude oil importer", said Commerzbank in a daily note.
Investors in ICE gasoil futures and options cut their net long position by 42,888 contracts to 61,216 lots, or 6.122 million tonnes of gasoil, in the week to May 2, when the price fell by more than 3 percent to a five-month low around $447 a tonne.
U.S. West Texas Intermediate (WTI) crude oil futures were trading at $46.87 per barrel, up 65 cents, or 1.4 percent from the last close.
The global oil market will soon rebalance and return to a "healthy state", Al-Falih said at the Asia Oil and Gas Conference on Monday.
OPEC meets on May 25 and the group's ministers have been talking up the chances of more production cuts.
But rollovers generally had little impact on prices or even a slightly negative effect ("The behaviour of crude oil spot and futures prices around OPEC and SPR announcements", Demirer and Kutan, 2010).