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Oil surges 5 percent as OPEC agrees output cut

Reuters  |  LONDON 

By Julia Payne

LONDON (Reuters) - jumped more than 5 percent on Friday as big producers in OPEC agreed to reduce output to drain global fuel inventories and support the market.

Benchmark Brent rose $3.48 a barrel to a high of $63.54 before easing back to around $63.20 by 1450 GMT. In early trade, Brent had fallen below $60 when it looked as if might not agree.

U.S. light crude rose $2.69 to a high of $54.18 a barrel before slipping to around $53.80.

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 weak prices. Talks with other producers were held on Friday.

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

But gave OPEC the green light on Friday to reduce by around 0.8 million barrels per day from 2019 after finding a compromise with rival over a possible exemption from the cuts, an OPEC 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 and sources said other non-OPEC producers could contribute a further 200,000 bpd of output cuts, bringing an overall cut to 1.2 million bpd.

"(A cut of) 1.2 million bpd, if implemented promptly and fully, should be enough to largely attenuate, but not eliminate, expected implied global inventory builds in the first half of next year," told Global Oil Forum.

"Given how much expectations were downplayed yesterday, this comes as a welcome surprise for the market," he added.

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

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

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 20:31 IST