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Oil prices up 2 percent as OPEC, Russia near output cut

Reuters  |  LONDON 

By Julia Payne

LONDON (Reuters) - jumped more than 2 percent on Friday as and the major producers in OPEC edged closer to an agreement to reduce output to try to drain inventories and support the market.

Benchmark Brent rose $1.80 a barrel to a high of $61.86 before easing back to trade around $61.50 by 1335 GMT. In early trade, Brent had fallen below $60 when it looked as if might be unable to agree a deal.

U.S. light crude rose $1.19 to a high of $52.68 a barrel.

Crude prices fell almost 3 percent on Thursday after the Organization of the Petroleum Exporting Countries ended a meeting in with only a tentative deal to tackle Talks with other producers were being held on Friday.

have plunged 30 percent since October as supply has surged and global demand growth has weakened.

appeared on Friday to be the main obstacle to an OPEC deal to cut output. OPEC sources said the group's de facto leader was opposed to exemptions in the deal demanded by Iran, which is under U.S. sanctions.

But an OPEC source said that had given a green light for OPEC to reduce its overall production by around 0.8 million barrels per day (bpd) from 2019. OPEC wants non-OPEC producers to contribute an additional 0.4 million bpd of cuts, the source said.

OPEC is seeking support from non-OPEC for supply cuts. Russian returned to on Friday after discussing the issue with

A source said was ready to contribute a cut of around 200,000 bpd.

Analysts said a big cut would be needed to reverse recent price falls and Russia's contribution would be vital.

"Reversing the overwhelmingly bearish price sentiment will likely require a credible and cohesive message from the OPEC meeting," U.S. Jefferies said, adding that 1 million bpd would not be enough.

from the world's biggest producers - OPEC, and the - has increased by 3.3 million bpd since the end of 2017 to 56.38 million bpd, meeting almost 60 percent of global consumption.

The surge is mainly due to soaring U.S. oil production, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the the world's biggest

The United States, which is not party to any output deal, last week exported more and fuel than it imported for the first time in records going back to 1973, data showed.

(Reporting by and in London and Henning Gloystein in Singapore; Editing by and David Evans)

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

First Published: Fri, December 07 2018. 19:15 IST