Oil prices steadied on Thursday on expectations that Saudi Arabia and Russia would extend production cuts, although record US exports and the return of supply from a Libyan oilfield dragged on the market.
"Oil news is contradictory," said Carsten Fritsch, analyst at Commerzbank in Frankfurt. "OPEC and Russia are talking about extending production limits, but there's still plenty of supply with US crude exports up sharply."
Brent crude LCOc1 was up 20 cents at $56.00 a barrel by 0800 GMT. US light crude CLc1 was unchanged at $49.98.
Both crude benchmarks have fallen more than 5 per cent over the last week as investors have booked profits after almost three months of gains.
Russian President Vladimir Putin said on Wednesday that a pledge by the Organisation 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.
The statement came ahead of a visit by Saudi Arabia's King Salman to 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 consultancy 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.
Sukrit Vijayakar at consultancy Trifecta, said these included 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.
The Energy Information Administration (EIA) said on Wednesday US crude oil exports jumped to 1.98 million bpd last week, surpassing the 1.5 million bpd record set the previous week.
The increase has been triggered by the wide discount in US crude prices against Brent WTCLc1-LCOc1, making US oil attractive on world markets.
Beyond short-term market drivers, analysts at Barclays bank said future oil demand could be undermined by improving fuel-efficiency and the rise of electric vehicles (EV).
Another report from Moscow adds: Agreements reached between Russia and Saudi Arabia on global oil supply have helped oil markets to stabilise, Saudi Energy Minister Khalid al-Falih said on Thursday.
The two countries, the world's biggest producers of crude, helped secure a deal between OPEC and rivals including Russia to cut supplies until the end of March 2018 in an effort to reduce a price-sapping glut.
Falih, whose country is the de facto leader of the 14-member Organisation of the Petroleum Exporting Countries, also said he welcomed the contribution of US shale oil supplies as global demand for crude was on the rise.
"Shale coming in and happening again in 2018 doesn't bother me at all. The market can absorb it," Falih said, speaking alongside Russian Energy Minister Alexander Novak as part of a panel discussion at an energy forum in Moscow.
The comments came a day after Russian President Vladimir Putin said the supply-cutting deal could be extended to the end of 2018, a longer timeframe than others have suggested.
