Oil gains 1 pct after Saudi Arabia pledges more output cuts
* Saudi Arabia announces higher-than-expected production cut
* Trump says could let March 1 deadline for China trade deal
* U.S. oil output to hit new record above 13 mln bpd in 2020
* U.S. crude oil stocks fall 998,000 bbls-API
(Adds U.S. crude stockpiles data)
By Laila Kearney
NEW YORK, Feb 12 (Reuters) - Oil prices rose more than 1
percent on Tuesday after OPEC figures showed it cut production
sharply in January, and as lead member Saudi Arabia said it
would reduce its output in March by an additional 500,000
Growing investor optimism for a breakthrough in the latest
round of U.S.-China trade discussions also boosted futures as
members of both sides met in Beijing.
Brent crude futures gained 91 cents, or 1.5 percent,
to settle at $62.42 a barrel. U.S. West Texas Intermediate (WTI)
crude oil futures rose 69 cents, or 1.3 percent, to
settle at $53.10 a barrel.
Oil prices edged up slightly post-settlement after data from
the American Petroleum Institute (API), an industry group,
showed U.S. crude oil stockpiles had unexpectedly fallen.
Crude inventories fell by 998,000 barrels in the week ended
Feb. 8 to 447.2 million, compared with analysts' expectations
for an increase of 2.7 million barrels. Crude stocks at the
Cushing, Oklahoma, delivery hub fell by 502,000 barrels, API
Production cuts effective to the end of June by the
Organization of the Petroleum Exporting Countries and allies led
by Russia have tightened markets despite rising output in
non-member countries, primarily the United States.
OPEC said on Tuesday it had reduced oil production almost
800,000 bpd in January to 30.81 million bpd under its voluntary
global supply pact.
Saudi Arabia Energy Minister Khalid al-Falih told the
Financial Times that the country would cut production to about
9.8 million bpd in March to bolster prices. As part of the OPEC
deal, that nation pledged to cut output to about 10.3 million
"The market was bid on the OPEC report, the OPEC numbers
themselves, and Saudi Arabia bringing the production numbers
down pretty good," said Bob Yawger, director of energy futures
Investors were also hopeful that a new round of U.S.-China
talks this week would bring the two sides close to resolving
their ongoing trade war ahead of a March 1 deadline, Yawger
U.S. President Donald Trump said he could push off the
deadline to hike tariffs on Chinese imports if the two sides get
close enough to striking a deal.
The Energy Information Administration said on Tuesday it
expected U.S. crude production to hit a new record of 13.2
million bpd through 2020, which took some steam out of the
rally, traders said.
OPEC also cut its forecast for 2019 world oil demand, citing
slowing economies and expectations of faster supply growth from
rivals, underlining the challenge it faces in preventing an oil
(Reporting by Laila Kearney;
Additional reporting by Noah Browning and Henning Gloystein
Editing by Marguerita Choy, Lisa Shumaker and Tom Brown)
First Published: 2019-02-12 02:44:32
Updated 2019-02-12 23:53:58
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