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Oil jumps on U.S.-China trade talk hopes, OPEC cuts

Reuters  |  NEW YORK 

By Stephanie Kelly

NEW YORK (Reuters) - prices jumped about 5 percent on Wednesday to their highest levels in nearly a month as U.S.-trade talks raised hopes of easing tensions between the world's two largest economies, while OPEC-led crude output cuts also provided support.

Intermediate (WTI) crude futures rose $2.58 to settle at $52.36 a barrel, a 5.18 percent gain, the first time this year that WTI has topped $50.

Brent crude futures gained $2.72, or 4.63 percent, to settle at $61.44 a barrel.

The sharp gains extended a rally that has pushed futures up about 14 percent in 2019.

U.S.-trade talks, which were carried over into an unscheduled third day, ended on Wednesday with negotiators focused on Beijing's pledge to buy "a substantial amount" of agricultural, and manufactured goods and services from the United States, the U.S. Trade Representative's office said.

"Thus far, the talks are still inspiring optimism that could preclude any sharp near-term down swings in the equities that could allow to maintain a recently established accumulation phase," Jim Ritterbusch, of Ritterbusch and Associates, said in a note.

prices also have received support from supply cuts by the Organization of the Petroleum Exporting Countries and allies including

The OPEC-led cuts, which officially began in January, are aimed at reining in an emerging glut as U.S. crude output has surged to a record 11.7 million bpd.

Saudi Arabia's minister said he was confident that action to rein in output would bring the into balance, adding that he would not rule out calling for further action.

also said the kingdom would export 7.1 million barrels per day (bpd) in February, down from 7.2 million bpd in January.

Data from the Information Administration (EIA) showed domestic crude stockpiles fell less than expected last week. Gasoline and distillate inventories rose more than anticipated.

Crude inventories fell by 1.7 million barrels, smaller than the 2.8 million-barrel draw analysts had expected.

Gasoline inventories rose by 8.1 million barrels, far exceeding analysts' expectations in a poll for a gain of 3.4 million barrels. Distillate stockpiles rose by 10.6 million barrels, more than five times the expected increase of 1.9 million barrels, the EIA data showed.

"All in all the report is bearish," said.

cut its 2019 by more than 10 percent. The said in a note it now expected Brent to average $61 a barrel this year and WTI to average around $54 per barrel.

(Reporting by in New York, Noah Browning in London and Henning Gloystein in Singapore; Editing by and Paul Simao)

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

First Published: Thu, January 10 2019. 02:11 IST