LONDON - Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a reduction in Canadian supply.
Benchmark Brent crude oil jumped by $1.89 to a high of $63.58 before easing back to trade around $63 at 1200 GMT. U.S. light crude was up $1 at $53.95 after gaining more than 3 percent to an intraday high of $54.55.
Both benchmarks climbed by around 4 percent on Monday after U.S. President Donald Trump and Chinese counterpart Xi Jinping agreed at a meeting of the Group of 20 industrialised nations (G20) to pause an escalating trade dispute.
"Buying pressures remain at the fore of the energy complex as market players keenly await fresh supply curbs from the OPEC/non-OPEC alliance," said Stephen Brennock, analyst at London brokerage PVM Oil.
The Middle East-dominated Organization of the Petroleum Exporting Countries will meet on Thursday in Vienna to agree future output and will discuss strategy with other producers outside OPEC, including Russia.
OPEC and its allies are working towards a deal to reduce output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to Russia about the extent of its production cuts.
"We expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday," U.S. bank Goldman Sachs said in a note to clients.
"A cut in OPEC and Russia production of 1.3 bpd will be required to reverse the ongoing counter-seasonally large increase in inventories."
It added that it expects a joint effort by OPEC and Russia to withhold supply to push Brent oil prices "above the mid-$60 per barrel level".
Helping OPEC in its efforts to rein in emerging oversupply was an order on Sunday by the Canadian province of Alberta for producers to scale back output by 325,000 bpd until excess crude in storage is reduced.
OPEC's biggest problem is surging production in the United States, where output - mostly from its southern shale fields - has grown by about 2 million bpd within a year to more than 11.5 million bpd.
Barclays bank said in a note to clients that oil production in Texas alone "reached 4.69 million bpd in September, compared with Iraqi output of 4.66 million by our estimates".
Iraq is OPEC's second-biggest oil producer behind Saudi Arabia.