Brent crude futures <LCOc1> were down 1 cent to $60.43 per barrel at 11:42 a.m. EDT (1542 GMT), and yet the benchmark was still close to its highest level since July 2015.
U.S. West Texas Intermediate (WTI) crude futures <CLc1> were 2 cents higher at $53.92 a barrel.
"The market has rallied pretty significantly and I think it’s predicated on the fact that the Saudis and Russians are continuing the cut agreement," said Gene McGillian, manager of research at Tradition Energy in Stamford, Conn.
The Organization of the Petroleum Exporting Countries plus Russia and nine other producers agreed to cut 1.8 million barrels per day (bpd) from January 2016 to clear a supply glut.
The pact, already renewed once, now runs to March 2018, but Saudi Arabia and Russia, who are leading the effort, have voiced support to for a further extension.
OPEC Secretary General Mohammad Barkindo said Russian-Saudi backing for an extension cleared the fog before the group's meeting in Vienna on Nov. 30.
Saudi Crown Prince Mohammad bin Salman repeated the kingdom's support for extending the deal at the weekend.
Monday's rally has pushed the Brent's December 2017 contract <LCOZ7> to a premium of $2.60 a barrel over the December 2018 contract <LCOZ8>.
This structure, known as backwardation, was at the top of OPEC's "to do" list, along with targeting record-high global inventories. Such a premium gives holders of physical oil an incentive to sell their stored barrels for a higher price.
JP Morgan raised its 2018 Brent and WTI forecasts by $11 and $11.40 to $58 and $54.63 per barrel, respectively.
The bank said the revision reflects OPEC and non-OPEC cuts and higher than expected demand growth tightening the oil market.
However, traders said a 900,000 bpd export capacity increase from Iraq's southern ports to 4.6 million bpd had prevented Brent rising further.
Iraq has increased exports from its southern oilfields to 3.45 million bpd to make up for a shortfall from the northern Kirkuk fields, Basra Oil Company Director General Ihsan Abdul Jabbar said.
Also keeping a lid on prices, U.S. production <C-OUT-T-EIA> is up almost 13 percent since mid-2016, resulting in a steep WTI discount of $6.50 per barrel against Brent <CL-LCO1=R>, increasing the attractiveness of U.S. crude exports.
(Additional reporting by Ahmad Ghaddar in London, Henning Gloystein in Singapore; Editing by Marguerita Choy and Louise Heavens)
By Julia Simon