Oil climbs 1pc on OPEC output cut, but United States production robust

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"While (US crude) inventories fell slightly more than expected, there was a large build in gasoline inventories". U.S. West Texas Intermediate (WTI) crude futures were up $1.70 to $53.77 a barrel, or 3.3 percent.

International Brent crude oil futures were up 62 cents, or 1.01 percent per barrel at 0955 GMT. The price of oil remains about 20 percent up on the 18-month low registered in late December, but investors appear to remain concerned about the trade war between the USA and China.

BNP Paribas head of commodities Harry Tchilingurian told the Reuters Global Oil Forum: "Brent needs to move past $62 before we can talk about $65".

United States output has soared by 2.4 million bpd since January 2018, stoking fears of a supply glut.

American crude oil production reached a record 11.9 million bpd in the week ending January 11, the Energy Information Administration (EIA) said on Wednesday, up from 11.7 million bpd last week, which was already the highest national output in the world.

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"Crude oil exports from the U.S. have strongly increased during the last few years and the trend is expected to remain positive", shipping brokerage Banchero Costa said in a note.

However, some signs of weakening demand and surging USA output may keep prices in check.

Oil prices rose over 1pc on Friday after a report from the Organization of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month, easing some fears about prolonged oversupply.

OPEC, in its monthly market report, warned that the economic risks in 2019 remained skewed to the downside. OPEC's share of that cut is 800,000 bpd.

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