Saudi Arabia and Russia say on sidelines of G20 summit they will set up a task force to review oil market fundamentals
Crude oil futures pared gains on Monday after top producers Russia and Saudi Arabia confirmed they had agreed to cooperate on stabilising the oil market, including limiting output.
Brent crude futures for November delivery were up 44 cents per barrel at $47.27 a barrel at 1413 GMT. They earlier hit a session high of $49.40 in anticipation of the Russia-Saudi deal.
US crude for October delivery was up 60 cents at $45.04 a barrel, after reaching a high of $46.53 a barrel earlier.
Saudi Arabia and Russia said on the sidelines of the G20 summit in China they had signed an agreement to set up a task force to review oil market fundamentals and to recommend measures and actions that would secure market stability.
Russian Energy Minister Alexander Novak said the two countries were moving to a strategic energy partnership and a high level of trust would allow them to address global challenges.
Saudi energy minister Khalid al-Falih told a UAE-based television channel he was optimistic about cooperation with other producers ahead of a meeting this month in Algiers, adding freezing production was not the only solution.
Saudi deputy crown prince Mohammed bin Salman told Russian President Vladimir Putin on the sidelines of the same summit that cooperation between the two countries would bring benefit to the global oil market.
"Verbal intervention was again needed to trigger a recovery towards $50," senior ABN Amro economist Hans van Cleef said.
"After all, if prices remain too low ahead of the (Algiers) meeting, there is a risk that at some point Russia and Saudi Arabia actually need to act. That would probably be the last thing they want as long as Iran is raising output."
Brent rallied to above $50 a barrel in late August, helped by growing talk of a coordinated production freeze, but prices have since fallen as few believe OPEC will act.
Iran, OPEC's third largest producer, has said it would only cooperate in talks to freeze output if fellow exporters recognised its right to fully regain market share.
Iran is ready to raise its output to 4 million barrels per day in a couple of months depending on market demand, a senior official from the National Iranian Oil Company said.