By Stephanie Kelly
NEW YORK (Reuters) - Oil prices jumped by more than 3 percent on Monday after the United States and China agreed to a 90-day truce in a trade dispute and Canada's Alberta province ordered a production cut, while exporter group OPEC looked set to reduce supply.
Brent crude futures rose $1.86, or 3.1 percent, to $61.32 a barrel, by 11:07 a.m. EST (1607 GMT). U.S. West Texas Intermediate (WTI) crude rose $1.68 to $52.61 a barrel, a 3.3 percent gain.
Both benchmarks surged by more than 5 percent earlier in the session.
China and the United States agreed during a weekend meeting in Argentina of the Group of 20 leading economies not to impose additional trade tariffs for at least 90 days while they hold talks to resolve existing disputes.
The trade war between the world's two biggest economies has weighed heavily on global trade and sparked concerns of an economic slowdown.
Oil also received support from an announcement by Alberta that the Western Canadian province will force producers to cut output by 8.7 percent, or 325,000 barrels per day (bpd), to deal with a pipeline bottleneck that has led to crude building up in storage.
The Organization of the Petroleum Exporting Countries meets on Thursday to decide output policy. The group, along with non-OPEC member Russia, is expected to announce cuts aimed at reining in a production surplus that has pulled down crude prices by around a third since October.
"While a reduction in output appears certain, the market will now be mainly focused on the size of any such reduction," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. "We feel that a decline of about 1.1-1.2 million barrels per day will be required if fresh price lows are to be precluded."
Qatar's decision to quit OPEC shows the frustration of small producers at the dominant role of a Saudi and Russia-led panel, Iran's OPEC governor Hossein Kazempour Ardebili told Reuters, adding that any supply cuts should come only from countries that had increased output.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)