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Oil gains one percent after Saudi Arabia pledges more output cuts

Reuters  |  NEW YORK 

By Laila Kearney

NEW YORK (Reuters) - rose more than 1 percent on Tuesday after OPEC 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.

edged up slightly post-settlement after data from the (API), an group, showed U.S. had unexpectedly fallen.

Crude inventories fell by 998,000 barrels in the week ended Feb. 8 to 447.2 million, compared with analysts' expectations for an increase of 2.7 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 502,000 barrels, API said.

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

OPEC 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 OPEC 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

(Reporting by Laila Kearney; Additional reporting by and Henning Gloystein; Editing by Marguerita Choy, and Tom Brown)

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

First Published: Wed, February 13 2019. 03:29 IST