Saudi Arabia and Russian Federation are leading the agreement by the Organization of Petroleum Exporting Countries and other producers to curtail oil supplies and end a three year surplus.
Citi's report said that Brent oil prices are set to rise over US$60 per barrel this year as long as OPEC countries agree with non-OPEC allies to honour their output cut.
USA crude inventories hit a record 535.5 million barrels C-STK-T-EIA this month.
"Saudi Arabian production reduction appears to be ahead of forecast and gave oil a boost", said Jeffrey Halley of futures brokerage OANDA in Singapore, as quoted by Reuters. OPEC oil producers will meet on May 25 to discuss the supply cut extension. The average production for the first quarter of the year stands at around 11.2 million barrels per day, 130,000 barrels per day lower than the fourth quarter, but 120,000 barrels per day higher year-over-year.
Crude oil for May delivery slid $0.29 to $53.11 a barrel after reaching a one-month high of $53.76 a barrel in morning trading.
Crude oil edged back from a five-week high on April 11, as rising US shale oil production weighed against support from tensions in the Middle East and production cuts in OPEC and other states.
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While speculation that the Organisation of Petroleum Exporting Countries (Opec) and its allies will extend their six-month pact aimed at eroding a global glut is helping boost prices, there is also concern that rising U.S. output will counter the reductions.
OPEC members pumped a combined 31.93 million barrels of crude daily last month, down 153,000 bpd from February, the group said in the latest edition of its Monthly Oil Market Report. Several OPEC countries, including Kuwait, have expressed public support for an extension, Bloomberg said.
The kingdom-OPEC's largest producer-reduced supply below 10 million barrels a day in March, more than pledged under the deal, according to the group's monthly report. Prices increased 35 cents to $55.24 on Friday.
US West Texas Intermediate (WTI) crude futures were up 18 cents, or 0.34 per cent, at $53.58 a barrel, also their highest since early March.
In the United States, production and inventories are surging.
"With the pick-up in drilling activity, as well as increasing cashflows in the tight oil industry, USA tight crude output is expected to rise quickly and increase 335,000 bpd for the overall of 2017", OPEC said, using another term for shale.