General lift off
Oil up 5 percent; market eyes less U.S. output, Saudi-Russia talks
By Barani Krishnan
NEW YORK (Reuters) - Crude prices jumped about 5 percent on Tuesday after No. 1 oil consumer the United States cut global output forecasts and Russia, Saudi Arabia and other big producers signaled joint action to support the market.
A weakening dollar added support for oil, aside from bets that the U.S. oil rig count could tumble again this week after last week's unexpectedly sharp decline of 26 rigs.
, the global benchmark for crude, was up $2.50, or 5 percent, at $51.75 a barrel by 11:28 a.m. EDT (1528 GMT).
Traders also cited technical buying for Brent at above $50 a barrel as it headed for its first three-day gain in a stretch after Monday's rise of more than 2 percent and Friday's climb of nearly 1 percent.
West Texas Intermediate (WTI), the benchmark, rose by $2.15, or 4.7 percent, to $48.41.
"We have reduced the probability of a return to the $37-$38 area per nearby WTI," said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago. "We will maintain a longstanding view that price declines below this support level are virtually off of the table."
Global oil demand will grow by the most in six years in 2016 while non-OPEC supply stalls, according to a monthly U.S. energy report that suggests a surplus of crude is easing more quickly than expected.
Total world supply is expected to rise to 95.98 million barrels a day in 2016, 0.1 percent less than forecast last month, the U.S. Energy Information Administration said in its Short-Term Energy Outlook. Demand is expected to rise 270,00 bpd to 95.2 million barrels a day, up 0.3 percent from September's forecast due in part to an outlook for stronger demand growth from China.
Russia's energy minister said Russia and Saudi Arabia had discussed the oil market in a meeting last week and would continue to consult each other.
"The market is possibly moving on speculation that OPEC and non-OPEC countries will find an agreement to cooperate," said Carsten Fritsch, senior oil analyst at Commerzbank (XETRA:) in Frankfurt.
OPEC Secretary-General Abdullah al-Badri at a conference in London that OPEC and non-OPEC members should work together to reduce the global supply glut.
Iran's crude oil sales were on track to hit 7-month lows as its main Asian customers bought less than before, countering expectations that Iranian oil supplies will surge once nuclear-related sanctions against Tehran are lifted.
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