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Oil gains 1 percent after Saudi Arabia pledges more output cuts

Reuters  |  NEW YORK 

By Laila Kearney

NEW YORK (Reuters) - Oil prices rose more than 1 percent on Tuesday after figures showed it cut production sharply in January, and as lead member said it would reduce its output in March by an additional 500,000 barrels.

Growing investor optimism for a breakthrough in the latest round of U.S.-trade discussions also boosted futures as members of both sides met in

Brent crude futures gained 91 cents, or 1.5 percent, to settle at $62.42 a barrel. U.S. Intermediate (WTI) rose 69 cents, or 1.3 percent, to settle at $53.10 a barrel.

Production cuts effective to the end of June by the Organization of the Exporting Countries and allies led by have tightened markets despite rising output in non-member countries, primarily the

said on Tuesday it had reduced almost 800,000 bpd in January to 30.81 million bpd under its voluntary global supply pact.

told that the country would cut production to about 9.8 million bpd in March to bolster prices. As part of the deal, that nation pledged to cut output to about 10.3 million bpd.

"The market was bid on the OPEC report, the OPEC numbers themselves, and bringing the production numbers down pretty good," said Bob Yawger, director of at

Investors were also hopeful that a new round of U.S.-talks this week would bring the two sides close to resolving their ongoing trade war ahead of a March 1 deadline, Yawger said.

U.S. said he could push off the deadline to hike tariffs on Chinese imports if the two sides get close enough to striking a deal.

The said on Tuesday it expected U.S. crude production to hit a new record of 13.2 million bpd through 2020, which took some steam out of the rally, traders said.

OPEC also cut its forecast for 2019 world oil demand, citing slowing economies and expectations of faster supply growth from rivals, underlining the challenge it faces in preventing an

U.S. crude stockpiles were forecast to have risen last week for a fourth straight week, ahead of data from the American Institute (API), an industry group, at 4:30 p.m. EST (2130 GMT).

(Graphic: U.S. & drilling levels -

(Reporting by Laila Kearney; Additional reporting by Noah Browning and Henning Gloystein; Editing by and Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 02:25 IST