A ministerial committee of OPEC and non-OPEC producers including Russia and Saudi Arabia recommended on Wednesday that OPEC and non-OPEC allies extend oil production cuts by nine months at a meeting the following day.
"That's one of the recommendations," Kuwait's Oil Minister Essam al-Marzouq told reporters when asked whether the committee had agreed on a nine-month extension.
An OPEC source also confirmed that the ministerial meeting agreed with the earlier proposal to extend production cuts until the end of 2018.
With oil prices rallying above $US60 per barrel, Russia has questioned the wisdom of extending existing cuts of 1.8 million barrels per day (bpd) until the end of next year as such a move could prompt a spike in US production.
Russia needs much lower oil prices to balance its budget than OPEC's leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.
On Tuesday, a joint OPEC/non-OPEC committee recommended extending cuts until the end of 2018 with an option of reviewing the arrangement at the next OPEC meeting in June, three sources from the Organisation of the Petroleum Exporting Countries said.
"In reality it would be only a three-month true extension with the review in June," said Olivier Jakob from Petromatrix consultancy. The existing cuts expire in March.
Some Russian producers including Rosneft, run by an ally of President Vladimir Putin, Igor Sechin, have questioned the rationale of prolonging the cuts, saying it will lead to a loss of market share to US firms, which are not reducing output.
OPEC, which comprises 14 countries, has traditionally been much less worried about exit strategies as its members have been known for reducing compliance and cheating on their quotas toward the expiry of such deals.
"Russia seems to be pushing OPEC to have a concrete plan to phase out the cuts when appropriate ... compared to the typical undisciplined OPEC strategy," US bank Tudor, Pickering, Holt & Co, which is active in the shale industry, said.
Separately, US crude oil stocks fell last week, led by the biggest fall in inventories at the Cushing, Oklahoma storage hub in eight years, while gasoline and distillate stockpiles rose, the Energy Information Administration said.
Crude inventories fell 3.4 million barrels in the week to November 24, compared with analysts' expectations in a Reuters poll for a decrease of 2.3 million barrels.
Most of the drop can be attributed to a fall in stocks at the Cushing, Oklahoma, delivery hub, which was down by 2.9 million barrels, EIA said.
This was the largest weekly draw at Cushing since September 2009, and analysts attributed the decline to the shutdown of the Keystone crude pipeline on November 16 after a leak of 5000 barrels of oil in South Dakota.
"The headline crude oil drawdown was supportive, but it was a function of the Keystone pipeline outage, which impacted Cushing inventories," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
That line, operated by TransCanada Corp, was reopened on Tuesday.
Stocks of gasoline and distillates rose more than anticipated. Distillate inventories, which include diesel and heating oil, rose 2.7 million barrels, versus expectations for a 230,000-barrel increase, the EIA data showed.