Oil prices snap out of slump on OPEC rhetoric

"Khalid al-Falih, the minister of energy, industry and mineral resources of Saudi Arabia and chairman of Saudi Aramco, all but guaranteed an extension of oil production cuts to be officially announced at the end of the month despite the protestations by some Russian oil companies," Phil Flynn, a senior market analyst for the PRICE Futures Group in Chicago, said in an emailed market report.

Members of the Organization of Petroleum Exporting Countries meet later this month to consider the fate of a multilateral production cut agreement that's credited with a major rally in crude oil prices during the third quarter. Strong commitment to the deal so far, plus lingering global tensions, pushed oil prices up about 25 percent since the start of the quarter.

A report from the Federal Reserve Bank of Dallas said U.S. commercial crude oil inventories, which are an indication of market balance, were 188 million barrels above the five-year average. In the Organization for Economic Cooperation and Development, inventories are 119 million barrels above 2010-14 average levels.

"While over half of the inventory overhang in OECD markets is concentrated in the United States, the 88-million-barrel decline in U.S. inventories since May is a promising sign that domestic inventories are rebalancing," the bank's latest report read.

Crude oil prices were soaring in overnight trading, but settling somewhat in the minutes before the opening bell in New York. The price for Brent crude oil, the global benchmark, was up 0.73 percent moments before the open to $61.81 per barrel. West Texas Intermediate, the U.S. benchmark, was up 1.3 percent to $55.91 per barrel.

Oil prices will react later in the day when drilling services company Baker Hughes releases its weekly rig count, which offers a loose gauge of exploration and production activity. Gains from the United States may pull down oil prices as that could suggest future production growth from U.S. shale basins.

This week, the International Energy Agency said U.S. shale oil production could double by 2025, adding more weight to the supply-side strains that last year pulled oil prices below $30 per barrel.

"Far from taking a breather, the U.S. shale revolution is just getting started and will dominate the supply-side of the oil equation for years to come," Stephen Brennock, an analyst with London oil broker PVM, said in an emailed market report.