NEW YORK: Oil prices jumped about 5 percent on Wednesday to their highest levels in nearly a month as US-China trade talks raised hopes of easing tensions between the world's two largest economies, while OPEC-led crude output cuts also provided support.
West Texas Intermediate (WTI) crude futures rose $2.58 to settle at $52.36 a barrel, a 5.18 percent gain, the first time this year that WTI has topped $50.
Brent crude futures gained $2.72, or 4.63 percent, to settle at $61.44 a barrel.
The sharp gains extended a rally that has pushed futures up about 14 percent in 2019.
US-China trade talks, which were carried over into an unscheduled third day, ended on Wednesday with negotiators focused on Beijing's pledge to buy "a substantial amount" of agricultural, energy and manufactured goods and services from the United States, the US Trade Representative's office said.
"Thus far, the talks are still inspiring optimism that could preclude any sharp near-term down swings in the equities that could allow oil to maintain a recently established accumulation phase," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Oil prices also have received support from supply cuts by the Organization of the Petroleum Exporting Countries and allies including Russia.
The OPEC-led cuts, which officially began in January, are aimed at reining in an emerging glut as US crude output has surged to a record 11.7 million bpd.
Saudi Arabia's energy minister said he was confident that action to rein in output would bring the oil market into balance, adding that he would not rule out calling for further action.
Khalid al-Falih also said the kingdom would export 7.1 million barrels per day (bpd) in February, down from 7.2 million bpd in January.
Data from the US Energy 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 Reuters poll for a gain of 3.4 million barrels. Distillate stockpiles rose by 10.6 million barrels, more than five times the expected increase of 1.9 million barrels, the EIA data showed.
"All in all the report is bearish," Commerzbank commodities analyst Carsten Fritsch said.
Morgan Stanley cut its 2019 oil price forecasts by more than 10 percent. The bank said in a note it now expected Brent to average $61 a barrel this year and WTI to average around $54 per barrel.
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