Around 1 million to 2 million barrels of crude are being produced globally every day in excess of demand, contributing to a 70 percent fall in oil prices since mid-2014.
Energy ministers of Russia, Saudi Arabia, Venezuela and Qatar agreed to freeze the oil output at January 11 level.
USA crude's West Texas Intermediate (WTI) futures closed up $1.35, or 3.9 percent, at $35.92.
On the flipside, the data showed that U.S. oil production fell for the 16th straight week. May Brent crude LCOK6, -0.19% on London's ICE Futures exchange rose $0.09 to $37.02 a barrel.
From the oil market's viewpoint that does not matter, Larry said.
Brent crude, the global benchmark, rose 0.7 per cent to $37.31 per barrel this morning, putting it on course to end the week with a gain of more than five per cent.
Ryuichi Sato of Mizuho Bank's derivatives marketing department said that "crude oil may come under increased selling pressure again based on the U.S.jobs data" coming out Friday, among other factors.
It keeps the most efficient shale oil in business while curtailing the production boom of the past few years; gives some breathing room to the big producing nations while maintaining the pressure on them for greater fiscal discipline and economic diversification; and satiates the growing appetite of the major import-dependent emerging economies while providing them the much-needed relief of reduced forex outflows.
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The surprising strength in the job numbers "does underline decent economic growth", thus boosting the demand outlook, said Kyle Cooper of IAF Advisors.
Both have gained about US$2 since last week.
With demand growth in Asia's top two importers looking reasonably strong, there does appear to be some justification for the view that oil prices will receive support from the demand side of the equation. Jobless claims rose (http://www.marketwatch.com/story/jobless-claims-climb-6000-to-278000-2016-03-03) by 6,000 to 278,000 in the last week of February, the Institute for Supply Management said the US service sector grew (http://www.marketwatch.com/story/US-service-sector-activity-eases-slightly-ism-says-2016-03-03) more slowly in February, and factory orders in January (http://www.marketwatch.com/story/factory-orders-rebound-in-january-2016-03-03) rose by a weaker-than-expected 1.6%.
US government data on Wednesday had already reported Cushing stockpiles at record highs of 66.3 million barrels last week.
Nigeria is also a part of the cartel, while major oil producers Russian Federation and the United States sit outside OPEC.
"Maybe in the short term it will help development in the oil market, we could see a return to maybe US$40", Aw said.
Market watchers have said there has been more bullishness spreading through the market.
Now the real question is with USA production declining and inventories at record levels, why are refiners still importing at such heights?