LONDON: Oil prices rose on Thursday as signs Saudi Arabia and Russia would limit production through next year outweighed record US exports and the return of production at a major Libyan oilfield.
"Bullish comments from the Russian and Saudi Energy ministers are helping arrest the recent decline in oil prices," said Stephen Brennock, analyst at London brokerage PVM Oil Associates.
Brent crude was up 70 cents at $56.50 a barrel by 1340 GMT. US light crude was 40 cents higher at $50.38.
Both crude benchmarks have fallen more than 5 percent over the last week as investors booked profits after almost three months of gains.
Russian President Vladimir Putin said this week that a pledge by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018.
Russian Energy Minister Alexander Novak said on Thursday that Moscow would support new countries joining the agreement to restrict oil supply.
The statement came as Saudi Arabia's King Salman visited Moscow.
"Putin and Salman will most likely reach, but not announce, an agreement to extend the OPEC/non-OPEC production deal, though with a commitment to taper the cuts," said Eurasia Group.
The pact on cutting output by about 1.8 million barrels per day (bpd) took effect in January this year.
Despite this, other factors weighed on oil prices, including the return to production of Libya's Sharara oilfield after an armed brigade forced a two-day shutdown.
Higher US oil exports also dampened market sentiment.
US crude oil exports jumped to 1.98 million bpd last week, surpassing the 1.5 million bpd record set the previous week, the Energy Information Administration said.
The increase followed a widening of the discount for US crude against Brent, making US oil attractive on world markets.
Beyond short-term market drivers, analysts at Barclays said future oil demand could be undermined by improving fuel-efficiency and the rise of electric vehicles (EV).
"EV uptake and increased fleet fuel-efficiency could cut oil demand by around 3.5 million bpd in 2025," the bank said. That is almost as much as major OPEC member Iran produces.
If the uptake of EVs rose to one third of new cars by 2040, as many industry analysts expect, up from just 1 percent now, that could "affect oil demand by around 9 million bpd", Barclays said.
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