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Oil up nearly 2 percent on Saudi and OPEC cuts

Reuters  |  LONDON 

By Browning

LONDON (Reuters) - prices gained nearly 2 percent on Tuesday, supported by OPEC-led production cuts which said it would surpass by over half a million barrels per day (bpd) and by sanctions against Iran and

Brent crude futures were up $1.17 or 1.9 percent at $62.68 a barrel by 1135 GMT. Intermediate (WTI) futures rose 89 cents or 1.7 percent to $53.30.

Markets are tightening because of voluntary production cuts, effective since Jan. 1, led by the Organization of the Petroleum Exporting Countries and allies including aimed at forestalling a global glut.

Saudi Arabia, the world's top exporter and de facto of OPEC, said it would reduce crude production to around 9.8 million bpd in March, over half a million bpd more than it originally pledged.

announced the move in an interview with published on Tuesday, as the kingdom seeks to drive up to help fund an economic transformation plan.

OPEC's for February will be issued at 1225 GMT on Tuesday.

Also on the radar are hopes expressed by 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, rising U.S. oil production, fighting near Libya's main oilfield, sanctions on and suspense over whether will grant more waivers to import Iranian unsure about broader supply.

"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 would "switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply".

Any economic slowdown 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 and Dale Hudson)

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

First Published: Tue, February 12 2019. 17:22 IST