Oil prices extend rally, with Brent topping $52 per barrel

May 16 (UPI) -- Indications that global crude oil levels were near balance and support from Kuwait for an extended production cap sent oil prices higher early Tuesday.

Crude oil prices continued to claw back from the April slump after Russia and Saudi Arabia this week called for extending a multilateral production ceiling into March 2018, three months longer than originally outlined.

The production arrangement is designed to erase the glut of crude oil that emerged on the market because of strong U.S. oil production and a former policy from members of the Organization of Petroleum Exporting Countries to defend a market share with more oil. The International Energy Agency reported Tuesday that the global market for crude oil was "almost balanced" during the first quarter.

Kuwait's oil minister said Tuesday the country was in "full support" of the position from Saudi Arabia and Russia to extend the agreement to March 31.

The price for Brent crude oil was up 0.58 percent about a half hour before the start of trading in New York to $52.12 per barrel. Light, sweet U.S. crude, West Texas Intermediate, was up 0.63 percent to $49.19 per barrel.

Balance has been a buzzword since OPEC introduced the production ceiling in November. A report from RBC Capital Markets said it was U.S. supply and demand metrics that are given heavy weight in the trading community.

"In our opinion, asymmetrical focus on U.S. fundamentals suggests that the oil trading community is over-fixating on the lagging rather than the leading indicators of market rebalance," Michael Tran, a commodity strategist for the Royal Bank of Canada, said in the emailed report. "The swift pace of U.S. production growth has surpassed expectations while storage levels will remain bloated through the balance of the year."

From the IEA's perspective, even though the market is close to balance, "much works remains to be done" to drain global inventories.

Crude oil prices have rallied since the U.S. Energy Information Administration reported a sizeable draw of oil inventories of 5.2 million barrels. Tuesday's rally could face pressure late in the day when the American Petroleum Institute issues its report on stockpiles, though S&P Global Platts said the analysts it surveyed are anticipating a 2.2 million barrel draw.