Oil prices rose on Monday after Saudi Energy Minister Khaled Al-Faleh said that the global market was heading towards balance, although signs of slowing demand in Asia weighed.
Brent crude futures were trading at $50.58 per barrel at 1152 GMT, up 23 cents from their last settlement. U.S. crude futures were up 14 cents at $49.13 per barrel.
U.S. markets are closed on Monday for the U.S. Independence Day holiday.
Monday’s gains came after Khalid al-Falih, Minister of Energy in Saudi Arabia, and Mohammed Barkindo, the newly appointed secretary general of the Organization of the Petroleum Exporting Countries, met in Saudi Arabia to discuss the stability of the oil markets. The two agreed that prices are starting to settle around current levels, as the market is starting to find a new balance between supply and demand, according to media reports.
However, analysts at Morgan Stanley said there were also signs that prices could fall again soon, pointing at stalling gasoline demand and more oil from Canada and Nigeria after production problems.
The Nigerian National Petroleum Corporation said last week that output was rising following repairs after attacks in the Niger Delta that had pushed crude output to 30-year lows.
A deal to unify Libya’s rival national oil corporations could pave the way for the OPEC member to boost output which currently stands at less than a quarter of pre-2011 levels of 1.6 million barrels per day (bpd).
SEB Markets chief analyst for commodities Bjarne Schieldrop said that such a deal would have a real and considerable impact on the oil market balance for 2017, potentially cancelling out any projected deficit.
Oil demand and, as a result, prices, could come under pressure as weak refining margins prompt run cuts at a time when plants in Asia are already gearing up for seasonal maintenance work.
“Asia refiners have already started to pull back … and there are reports of cargoes struggling to sell,” Morgan Stanley analysts said on Monday.
Investors are also watching the outlook for U.S. production, with drillers last week adding oil rigs for a fourth week in five, in the best month of producers returning to the well pad since August 2015.
Russian oil output in June rose slightly from the previous month to 10.84 million bpd.
In Norway, oil workers signed a deal on Saturday, avoiding a strike in Western Europe’s top producer.