Oil rises to $58.53; lifted by OPEC cuts, steadying stock market

Crude Oil

Crude Oil

As of 13:57 Moscow time, Brent jumped 2.77% to $58.64 a barrel on London's Intercontinental Exchange.

The energy alliance between kingpin and non-OPEC heavyweight faces its "toughest test yet" next week, analysts have told CNBC, ahead of a much-anticipated meeting between the influential oil cartel and its allies.

Moving forward, the American Petroleum Institute will publish its weekly report on USA crude oil supplies ahead of tomorrow's official DoE report.

Futures in NY increased as much as 1.6 percent following six days of gains, the longest streak of increases since July 2017.

U.S. West Texas Intermediate (WTI) crude oil futures CLc1 settled up $1.26, or 2.6 percent, at $49.78 a barrel.

Crude oil prices were slightly down at the start of trading on Tuesday, despite reports that Saudi Arabia cut its crude exports to help boost prices.

Oil extended its longest run of daily gains in 17 months on renewed efforts by the US and China to reach a trade deal, and expectations the market will be tightened by OPEC's output cuts. Record high crude oil production C-OUT-T-EIA has pushed up USA inventories.

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Rising optimism on a potential US-China trade deal continues to morph into extra oxygen for the risk-associated complex, in turn pushing prices of the American reference for the sweet light crude oil to fresh multi-day peaks in levels just shy of the $50.00 mark per barrel.

"When stock markets are strong oil usually follows suit", PVM Oil Associates strategist Tamas Varga said. Traders are also expecting that the decision of OPEC and some non-OPEC members including Russian Federation to reduce crude output by 1.2 million barrels per day from this month will significantly alter supply - demand imbalance in the market.

Oil prices edged higher on Monday, rebounding further from 1-1/2-year lows reached in December, on support from OPEC production cuts and steadying equities markets.

American crude stockpiles probably declined by 1.75 million barrels last week, according to the median estimate in a Bloomberg survey of analysts ahead of government data on January 9. Shares have risen on expectations that trade talks this week between the United States and China will ease the trade war.

US Commerce Secretary Wilbur Ross said on Monday that Beijing and Washington could reach a trade deal that "we can live with" as dozens of officials from China and the United States held talks in a bid to end a trade spat that has roiled global markets since previous year.

Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for USA light crude by $9 to $57 a barrel.

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