Brent crude, the global benchmark, was trading 2.5 per cent up at $58.60 a barrel last night as officials from the two countries began talks yesterday. Oil futures have gained more than 7 percent since last Monday.
"Momentum is coming back into the market from very depressed price levels", Petromatrix strategist Olivier Jakob said.
The oil prices are drawing support from an agreed supply cut by the Organization of the Petroleum Exporting Countries, well as some non-member countries such as Russian Federation and Oman.
The aim of the production cut is to rein in a surge in global supply, driven mostly by the United States, where production grew by almost a fifth to over 11 million bpd in 2018.
Rising production from North American shale basins, particularly the USA, which surged past 11 million bpd in August, outpaced sovereign producers Saudi Arabia and Russian Federation and was one of the factors behind the market's oversupply, the report said.
Oil futures Tuesday finished higher for a seventh straight session, the longest run of gains in roughly 18 months, with prices lifted by global efforts to curb crude output, as well as measured optimism around U.S.
Consultancy JBC Energy said it was likely that U.S. crude oil production was already "significantly above 12 million bpd" by early January.
As a result, US crude oil production rose by 2 million barrels per day (bpd) a year ago to a world record 11.7 million bpd.
Supporting Ritterbusch's observations was news from Genscape that US crude inventories at Cushing, Oklahoma fell by 565,000 barrels from last Tuesday to Friday. Some of the factors became responsible for a sharp decline in the prices of oil and the experts believe those are not leaving the market soon.
A trade agreement could mitigate the global economic slowdown and keep global oil demand high; however, failure to reach a deal would worsen economic growth prospects and keep a downward pressure on oil demand and prices, according to experts.
Goldman Sachs said in a note it had downgraded its average Brent crude oil forecast for 2019 to $62.50 a barrel from $70 due to "the strongest macro headwinds since 2015".
The bank stated, "We expect that the oil market will balance at a lower marginal cost in 2019 given: higher inventory levels to start the year, the persistent beat in 2018 shale production growth amidst little observed cost inﬂation, weaker than previously expected demand growth expectations (even at our above consensus forecasts) and increased low-cost production capacity".