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Oil up more than four percent on U.S.-China trade talk hopes, OPEC cuts

Reuters  |  NEW YORK 

By Stephanie Kelly

NEW YORK (Reuters) - jumped more than 4 percent on Wednesday as the extension of U.S.-talks raised hopes of easing trade tensions between the two superpowers, while OPEC-led crude output cuts also provided support.

U.S. Intermediate (WTI) crude futures rose $2.38 to $52.16 a barrel, a 4.8 percent gain, by 1:15 p.m. EST (1815 GMT), the first time this year that WTI has topped $50.

Brent crude futures gained $2.48, or 4.2 percent, to $61.20 a barrel.

Intermediate (WTI) crude futures for February delivery rose $2.38 to $52.16 a barrel, a 4.8 percent gain.

The day's sharp gains extended a rally that has pushed prices up more than 13 percent in 2019.

"After a dreadful December for risk markets, continues to catch a positive vibe," said at in Singapore, noting that investors were growing less fearful that U.S.-trade tensions would slow global economic growth and dampen demand for crude.

The trade talks in were carried over into an unscheduled third day, amid signs of progress on issues including Chinese purchases of U.S. farm and commodities.

Daily said was keen to end the trade dispute, but that any agreement must involve compromise.

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. also said he would not rule out calling for further action.

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 3.4 million-barrel gain. Distillate stockpiles rose by 10.6 million barrels, more than five times the expected 1.9 million-barrel increase, the EIA data showed.

"The report is bearish given the smaller-than-expected decline in inventories and the very large increase in refined product inventories," John Kilduff, a at Management in New York.

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 Dale Hudson, and Richard Chang)

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

First Published: Wed, January 09 2019. 23:57 IST