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NYMEX Crude $ 48.85 UP $1.0100
NY Harbor ULSD $1.5096 UP $0.0163
NYMEX Gasoline $1.5954 UP $0.0193

NEWS
Oil prices settled at a two-week high on Monday after energy ministers from Saudi Arabia and Russia released a joint statement backing a nine-month extension of OPEC-led production cuts.

That would keep current output caps in place through the first quarter of 2018 if agreed to by all parties at the coming meeting of the Organization of the Petroleum Exporting Countries on May 25.

On the New York Mercantile Exchange, June West Texas Intermediate crude rallied $1.01, or 2.1%, to settle at $48.85 a barrel, the highest settlement since April 28, according to FactSet data. But prices finished below earlier highs above $49 after a month report from the Energy Information Administration revealed expectations for a monthly climb in U.S. shale oil production.

July Brent on London’s ICE Futures exchange gained 98 cents, or 1.9%, to end at $51.82. “There seems to be a real commitment about reducing the glut from oil powerhouses that are Saudi Arabia and Russia—the latter being the largest oil producer in the world and the former being the largest exporter,” said Fawad Razaqzada, technical analyst at Forex.com, in a Monday note.

Late last year, OPEC and a handful of non-cartel producers, including Russia, agreed to reduce collective daily output by 1.8 million barrels. The latest OPEC production data indicated that stockpiles remain elevated, even as participants have complied with the output quotas. But at a joint news conference in Beijing, Saudi Energy Minister Khalid Al-Falih said, “the agreement needs to be extended,” possibly to the end of the first quarter of 2018, because the market “will not reach the desired inventory level” by the end of June. Russian Energy Minister Alexander Novak added preliminary consultations show that everyone is “committed” and he doesn’t “see reasons for any country to quit.” “Given the backing of Russia, in my view an agreement will be made,” Razaqzada said. “The market clearly expects that, with oil prices making a sharp comeback.” He said that over the next 10 days or so, oil prices “may continue to drift generally higher.” He expects a “sharp reaction higher” if the expected news comes out on May 25. Even if the production cuts are extended at next week’s meeting, the market will continue to be concerned by growing crude production in the U.S., analysts have said.

The EIA on Monday said oil production from seven major U.S. shale plays is forecast to climb by 122,000 barrels a day to 5.401 million barrels a day in June from May. American oil-drilling activity has also risen for 17 straight weeks, according to Baker Hughes’ rig-count data, and the U.S. government last week boosted its domestic-production estimates for this year and next. Meanwhile, over in China, oil imports are expected to remain robust as domestic production wanes. China’s crude production fell 6% from the same period in 2016.