Oil prices reached their highest levels in more than five weeks on Tuesday as the market largely held gains that came from speculation producers would take action to prop up the market.
Production losses in Nigeria, where more than 700,000 barrels per day (bpd) was missing due to militant attacks and pipeline problems, also helped to support prices.
Brent crude futures hit a high of $48.81 per barrel, their highest since July 7, in morning trade. They were trading at $48.45 per barrel at 1422 GMT, up 10 cents from their last close.
U.S. West Texas Intermediate crude reached $46.21 per barrel, its highest since July 15, before easing to $45.94, up 20 cents from the previous close.
Prices had dipped after negative U.S. economic data and as some investors cashed in during Asian hours. But the benchmarks have mostly held their roughly 16 percent rally since early August.
Much of the gains have been attributed to investor expectation that oil producers will take action to rein in ballooning oversupply. That stemmed from comments by Saudi Energy Minister Khalid al-Falih, who said the kingdom would work with others to stabilise oil markets.
“It was a piece of good news that the market latched onto,” said Harry Tchilinguirian, head of commodity market strategy at BNP Paribas.
But analysts including Tchilinguirian, were sceptical of any such deal. Nigerian Oil Minister Emmanuel Ibe Kachikwu also expressed doubts.
“Optimism on my part is quite sparse, but I believe engagement with the 70 percent oil producers might have an impact,” Kachikwu wrote on his Twitter account.
The oil production losses in Nigeria, which has been beset by escalating militant attacks in the oil rich Niger Delta region this year, echoed lower output in Venezuela.
“August and September, from a fundamental perspective, look strong,” said Dominic Haywood of Energy Aspects, citing robust refinery runs, production losses and subdued oil production in the United States.
Venezuela is on track for its steepest annual oil output drop in 14 years as it struggles with an economic and political crisis and years of under investment and mismanagement.
In the United States, the Energy Information Administration said it expected the country’s shale oil production to fall for a tenth consecutive month in September.
Source: Reuters (Additional reporting by Mark Tay and Henning Gloystein in Singapore; Editing by Jon Boyle and William Hardy)