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Oil up 1 percent on Saudi and OPEC cuts but outlook picture clouded

Reuters  |  LONDON 

By Browning

LONDON (Reuters) - prices gained about 1 percent on Tuesday, supported by OPEC-led production cuts and U.S. sanctions against and Venezuela, though remain wary of surging U.S. output and the outcome of U.S.-trade talks.

Brent crude futures were up 61 cents at $62.12 a barrel and U.S. Intermediate (WTI) futures rose 54 cents to $52.95 a barrel by 0950 GMT.

The continuing closure of parts of the that brings Canadian into the also helped to prop up WTI, traders said, after a partial shutdown at a crude distillation unit led to initial sell-offs on Monday.

Analysts said markets are tightening because of voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, as well as U.S. sanctions on OPEC members and

Saudi Arabia, the world's top exporter and de facto of OPEC, said on Tuesday that it would reduce to nearly 9.8 million barrels per day (bpd) in March, about half a million bpd more than it originally pledged.

Also at the radar are hopes expressed by U.S. and Chinese officials that a new round of talks, which began in on Monday, would bring them closer to easing their months-long trade war.

and are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

However, climbing U.S. oil production, fighting near Libya's main oilfield, sanctions on and suspense over whether the U.S. will to grant more waivers to import Iranian unsure about the broader supply picture.

"We believe that oil is not pricing in supply-side risks lately as markets are currently focused on U.S.-trade talks", said in a weekly note.

Should U.S.-talks succeed, the U.S. said that would "switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply".

Any economic slowdown this year could cap

of America also warned of a "significant slowing" in global growth, adding that it expects Brent and WTI to average $70 and $59 a barrel respectively in 2019 and $65 and $60 in 2020.

(Reporting by Browning; Additional reporting by Henning Gloystein; Editing by David Goodman)

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

First Published: Tue, February 12 2019. 15:55 IST