Investing.com - Oil prices steadied around three-week highs in European trading on Tuesday, one day after rallying more than 2% on news that Saudi Arabia and Russia agreed to extend oil output cuts for a further nine months until March 2018.
The U.S. West Texas Intermediate crude June contract ticked up 20 cents, or around 0.4%, to $49.05 a barrel by 3:35AM ET (07:35GMT).
The U.S. benchmark ended Monday's session with gains of $1.01, or 2.1%, after hitting its highest since April 28 at $49.66.
Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London rose 23 cents to $52.05 a barrel. The global benchmark touched its strongest level since April 21 at $52.63 in the prior session.
Oil's gains on Monday came after Saudi energy minister Khalid al-Falih and his Russian counterpart Alexander Novak said they had agreed to prolong an existing production cut deal by another nine months until March 2018.
However, the 12 remaining OPEC members and other producers participating in the cuts have to agree to the extension during a meeting on May 25.
In November last year, OPEC and other major global producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January and June, but so far the move has had little impact on inventory levels.
Crude sank to a five-month low earlier this month, rattled by concern over increasing U.S. crude output that has shaken investors' faith in the ability of OPEC to rebalance the market.
The U.S. rig count rose for the 17th week in a row to the highest level since August 2015 last week, implying that further gains in domestic production are ahead.
Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.2 million barrels.
Elsewhere on Nymex, gasoline futures for June climbed 0.8 cents, or roughly 0.5%, to $1.602 a gallon, while June heating oil added 0.8 cents to $1.518 a gallon.
Natural gas futures for June delivery added 2.0 cents to $3.369 per million British thermal units.