Oil surges 3 pct on OPEC glut-cut plan, signs of U.S-China thaw
* To boost confidence in oil cut, OPEC issues quota list
* U.S. drillers cut most oil rigs since Feb. 2016 -Baker
* China offers to ramp up U.S. imports -Bloomberg
(Updates with settlement prices, market activity, adds
By Laila Kearney
NEW YORK, Jan 18 (Reuters) - Oil prices jumped about 3
percent on Friday, rising after OPEC detailed specifics on its
production-cut activity to ease global oversupply, and on signs
of progress in ending the U.S.-China trade war.
Brent crude was up $1.52 to settle at $62.70 a
barrel, or 2.48 percent. U.S. West Texas Intermediate (WTI)
crude futures added $1.73 to settle at $53.80 a barrel,
or 3.32 percent.
The futures benchmarks posted their third straight week of
gains, rising about 4 percent since the close since the previous
The Organization of the Petroleum Exporting Countries
released a list of oil production cuts by its members and other
major producers starting on Jan. 1 2019 to boost confidence in
its oil supply reduction pact.
"It's going to send a signal to the market that they're
serious," said Phil Flynn, an analyst at Price Futures Group in
Chicago. "And it's probably going to use some peer pressure to
make sure compliance stays strong."
The producer group agreed in December to cut 1.2 million
barrels per day to support oil prices and shrink an oil glut at
a time of rising supply, especially from the United States.
On Thursday, OPEC's monthly report showed it had made a
strong start in December before the pact went into effect,
implementing the biggest month-on-month production drop in
almost two years.
U.S. drillers cut 21 oil rigs this week, the biggest decline
since February 2016. The rig count, an indicator of future
production, fell to 852, the lowest since May 2018, General
Electric Co's Baker Hughes energy services firm said in
its closely followed report. <RIG-OL-USA-BHI>
Fresh signals that Washington and Beijing might be nearing
the end of their tariff fight also boosted markets.
"The oil market has been taking the U.S.-China trade war the
hardest because China is so central to the demand side of the
equation," said John Kilduff, partner at Again Capital
Management. "This is what the market is looking to seize upon to
get past this bump in the road."
A Bloomberg report showed China offered to go on a buying
spree of U.S. goods, which investors saw as an attempt to draw
closer to a trade deal with Washington.
Reuters reported on Jan. 9 that U.S. officials demanded
during trade talks in Beijing more details about China's pledge
to make big purchases of American goods. China offered similar
commitments on a smaller scale during talks in Washington last
The International Energy Agency kept its estimate of oil
demand growth unchanged and close to 2018 levels despite saying
U.S. oil production growth, combined with a slowing global
economy, would weigh on oil prices.
(Additional reporting by Noah Browning in London, Henning
Gloystein and Koustav Samanta, and Scott DiSavino in New York;
editing by Marguerita Choy and David Gregorio)
First Published: 2019-01-18 02:43:48
Updated 2019-01-18 22:22:42
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