Oil holds near 27-month high as Saudi backs extended output cuts

Oil is holding on Thusday's gains, with Brent trading near 1-1/2 year high on increased odds of output cut deal extension beyond March 2018.

At the time of writing, Brent traded higher by 8 cents or 0.13 percent at 59.38/barrel. WTI traded flat lined around $52.60/barrel.

Saudi Arabia’s Crown Prince Mohammad bin Salman told Reuters on Thursday that the kingdom is willing to extend the output cut deal in order to rebalance the oil market. Earlier this month, OPEC's secretary general Barkindo had informed markets that the cartel is working to build consensus on extending the output cut deal.

Saudi's willingness to do the needful indicates the deal could be extended well beyond March 2018. In the recent past, Russia, too, had expressed readiness to cut output for an extended period of time.

No wonder, a strong dip buy mentality is seen in the oil markets. Prices could rally further if the Bakers Huges data due in North American session shows a big drop in the US oil rigs.