Oil prices surged higher on Tuesday following reports indicating that Russia and Saudi Arabia are considering extending the oil production cut deal agreed between the members of both Organization of the Petroleum Exporting Countries (Opec) and non-Opec once it expires in March 2018.

The Opec and other producers led by Russia are cutting oil output until the end of March next year. A committee of Opec and non-Opec nations recommended extending the curbs further if needed, reported CNBC.

Russia's Energy Minister Alexander Novak was a key architect of the output cut deal that was extended by nine months last May.

Novak was quoted by the domestic news agency Tass as saying on Tuesday that representatives from the two countries had talked about an extension but that no specific decisions had yet been reached.

The comments follow remarks attributed to Iranian Oil Minister Bijan Zanganeh on Monday night that participants' compliance with the terms of the deal had been improving.

"I think the oil market is balanced. Opec members' compliance with output cuts has not fallen in the last six months; it has increased," Zanganeh was quoted by Reuters as saying via the Iranian oil ministry's news agency Shana.

The minister is reported to have added that unofficial talks between deal participants are currently underway.

Novak pointed out that the oil market was likely to move into balance by the first quarter of 2018, stated the CNBC report.
 
The deal has so far led to a pullback of around 1.2 million barrels per day (bpd) of production generated by Opec members and around an additional half of that figure again by non-Opec participants.

However, compliance has been weakening according to monitors at the International Energy Agency, who claim that Opec members' levels of compliance slipped to their poorest in six months in June as several countries elected to produce beyond the agreed limits.

Brent oil was trading 0.29 percent higher at $52.50 per barrel at 9:50 a.m. London time on Tuesday while WTI was over a percent higher at $47.79. Since the original agreement was announced last November, Brent has gained around 6 percent while WTI has moved 13 per cent higher, stated the CNBC report.

In addition to the effects of the agreement, increasing output from US shale producers and a measured recovery in global demand have also been key influences pulling and pushing on the oil market over that period, it added.