In addition to the potential extension of the OPEC agreement into 2018, some ministers have also discussed the possibility of deepening their output cuts, said four delegates.
If OPEC decides to roll over its current agreement for a further six months without substantial changes when ministers meet on May 25, the decision may not boost prices much, though it could stop them weakening further. The group seems well positioned to continue with its attempts to eliminate a global supply overhang which has depressed prices to less than half their 2014 high.
Brent crude, the global oil benchmark, rose 19 cents, or 0.4%, to $49.53 a barrel on London's ICE Futures exchange, having last week hit its lowest level since the Organization of the Petroleum Exporting Countries agreed to cut output for six months on November 30. Prices slid back to levels seen in November before the supply deal was made. Higher output in non-Opec countries, particularly the United States, Canada and Brazil, has offset Opec's deal reached a year ago to cut production and kept pressure on oil prices.
"We have unloaded 55 million barrels of oil in floating storage in the Caribbean and elsewhere, we drew crude [oil stocks in the US] in April counter-seasonally for the first time in 10 years", but it hasn't been moving quickly enough for oil traders.
The June delivery for Brent, on the other hand, dropped by 0.8% or 47 cents to reach $54.89 per barrel.
USA crude production has risen by over 10 per cent since mid-2016 to 9.3 million bpd, close to the output of top producers Russian Federation and Saudi Arabia.
"There's a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet", Saudi Arabia's OPEC Governor Adeeb Al-Aama told Reuters on Friday. While Goldman Sachs Group Inc. and Citigroup Inc. see the market tightening and say the recent selloff wasn't based on fundamentals, concerns remain about the pace of rising USA supply.
Traders stated that oil prices fell due to continued pressure from the rising production in the United States along with a slowdown in China's economy.
USA energy companies last week extended a recovery in oil drilling into a 12th month, energy services firm Baker Hughes Inc said on Friday.
On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 15 cents, or 0.2%, at $46.58 a barrel. Its forecast for total output in 2018 rose to 9.96 million bbl/d from 9.9 million bbl/d.
Many analysts now see US crude output heading towards 10 million bpd over the next year or so.
Miners also benefited from the advance in oil prices with Glencore climbing 2.9% and Antofagasta rising 2.5% in London.