Oil steady after gains on Saudi output cuts

TOKYO (Reuters) - Oil prices were little changed on Friday after gaining nearly 1 percent the day before on news that Saudi Arabia had cut production to meet OPEC's agreement to reduce output.

Saudi Arabia has been curbing oil output in January by at least 486,000 barrels per day (bpd) to 10.058 million bpd, fully implementing OPEC's agreement to slow production, according to a Gulf source familiar with Saudi oil policy.

NYMEX crude for February delivery was down 7 cents at $53.69 a barrel by 0016 GMT, after closing up 50 cents on Thursday. For the week, the contract is likely to be largely steady.

London Brent crude for March delivery was yet to trade after settling up 43 cents at $56.89 a barrel.

Prices had fallen earlier on Thursday after data showed a surprisingly large increase in U.S. gasoline and distillate inventories. [EIA/S]

U.S. crude stocks dropped sharply to end the year, the Energy Information Administration said, with a draw of 7.1 million barrels, but stocks of gasoline and distillates surged as refiners ramped up production to reduce crude inventories, a year-end practice to avoid higher taxes.

(Reporting by Osamu Tsukimori; Editing by Joseph Radford)