Business a.m learnt that OPEC and its allies are in talks to further increase the existing supply cut of 1.2 million barrels per day (bpd) by 4,000 bpd with an extension till June 2020.
Saudi Aramco's stock market debut, which is expected Friday, has put Saudi Arabia in a precarious position as it bets on what volume of oil production will hit a sweet spot for prices, with the added pressure of considering the interests of the state-run oil giant's shareholders.
"We have a clear message to the OPEC+ countries: A "roll-over" of the current production agreement is not enough to preserve a balanced market and ensure a stable oil price environment in 2020", said Bjørnar Tonhaugen, head of oil market research at Rystad Energy.
OPEC+ is poised to hold a debate about lax implementation of oil-production cuts in Vienna this week, with Russian Federation asking to discuss a rule change that would exclude some of its oil production from the group's quota.
The oil-producing nations will decide whether to stick with production cuts they've endured for the past three years, relax them or deepen them in the hopes of propping up prices.
U.S. President Donald Trump on Tuesday said an agreement to end the trade conflict may have to be delayed until after the American presidential election next November.
Meanwhile, in a paradoxical twist, with Saudi Arabia raging at Iraq for overproducing, the Iranian neighbor signaled that it, along with other cartel members, favor deepening collective cuts by 400,000 barrels a day.
"Iraq has surpassed its production target this month every month", said Rousseau.
Brent for February settlement added 37 cents, or 0.6%, to $61.19 a barrel on the London-based ICE Futures Europe Exchange. "Granted, there are some riots in the country, but I do not think they will be voluntarily reduced".
"Ongoing concerns over the global economy and the US-China trade war continue to weigh on prices but US crude inventories are expected to have declined last week which may lend some support", Phil Flynn, analyst at Price Futures Group in Chicago, said in a note.
Oil gained as the USA and China were moving closer to a trade deal and before OPEC+ decides on its output-cut policy later this week.
Much depends on how US onshore shale producers react to OPEC's plans.
"If something goes awry with Saudi production in the next few months, and there's a fairly good chance something will happen".