Under the current agreement that started on January 1, the OPEC, and other producers including Russian Federation pledged to cut output by nearly 1.8 million barrels per day (bpd) during the first half of the year.
That is longer than the optional six-month extension specified in the deal, and shows that the battle to reduce overall supply has been more hard than originally anticipated, in part because of rising USA production.
"When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen", Tamas Varga, of oil broker PVM, said in a report.
"That said, we are skeptical about Russia's willingness to actively participate in any extended cuts".
In late November, OPEC agreed to cut production by 1.2 million barrels a day, the first such reduction agreement since 2008.
Goldman said that beyond the ongoing rise in USA oil production, which is up over 10% since mid-2016 to 9.3 million bpd, output will increase by OPEC members who were exempt from the cuts, or where supply disruptions had ended, including Libya and Nigeria.
In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices. The production cut deal was brought about as an attempt to cut the supply and push up the prices of oil which had been falling over the last several months.
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Mining giants Glencore and BHP Billiton were both up by about 1.5%, while oil giant BP rose 1.6% as the price of crude jumped 2%.
James Woods, investment analyst at Rivkin Securities, said world oil supplies would likely remain plentiful, even if Opec extended the production cut as expected.
Libya pumped as much as 1.6 million barrels a day before an uprising in 2011, and it was exempted from OPEC's cuts due to internal strife.
Earlier this month, Saudi Arabia's oil minister indicated that his country would back an extension to the cap.
Some analysts said that United States production could still threaten to disrupt the market balance unless the cuts were deepened. The deal could cut production by 1.2 MMbpd from OPEC and 0.6 MMbpd from non-OPEC producers.
Russian Federation and Saudi Arabia, the largest of the 24 nations that agreed to reduce supply for six months, are reaffirming their commitment to the deal amid growing doubts about its effectiveness. "As producers in the USA are expected to increase output, prices will continue to be restricted from rising".
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