Oil surges 3% on Opec glut-cut plan, signs of US-China thaw

New York - Futures benchmarks post third straight week of gains

Oil prices jumped about 3 per cent, rising after Opec detailed specifics on its production-cut activity to ease global oversupply, and on signs of progress in ending the US-China trade war. 
Brent crude was up $1.52 to settle at $62.70 a barrel, or 2.48 percent. US West Texas Intermediate crude futures added $1.73 to settle at $53.80, or 3.32 per cent. 
The futures benchmarks posted their third straight week of gains, rising about 4 per cent since the close since the previous Friday. 
The Organization of the Petroleum Exporting Countries released a list of oil production cuts by its members and other major producers starting on January 1, 2019, to boost confidence in its oil supply reduction pact. 
"It's going to send a signal to the market that they're serious," said Phil Flynn, an analyst at Price Futures Group in Chicago. "And it's probably going to use some peer pressure to make sure compliance stays strong." 
The producer group agreed in December to cut 1.2 million barrels per day to support oil prices and shrink an oil glut at a time of rising supply, especially from the United States. On Thursday, Opec's monthly report showed it had made a strong start in December before the pact went into effect, implementing the biggest month-on-month production drop in almost two years. 
Fresh signals that the US and China might be nearing the end of their tariff also boosted markets. 
"The oil market has been taking the US-China trade war the hardest because China is so central to the demand side of the equation," said John Kilduff, partner at Again Capital Management. "This is what the market is looking to seize upon to get past this bump in the road." 
A Bloomberg report showed China offered to go on a buying spree of US goods, which investors saw as an attempt to draw closer to a trade deal with Washington.
21 US rigs closed
Meanwhile, US energy firms cut 21 oil rigs last week, the biggest decline since February 2016, as drillers reacted to the 40 per cent plunge in US crude prices late last year. 
Drillers cut 21 oil rigs in the week to January 18, bringing the total count down to 852, the lowest since May 2018, Baker Hughes said.
 
Many of the rigs cut were in the Permian Basin in Texas and New Mexico, the country's biggest shale oil formation, were the rig count dropped by seven this week to 481, the lowest since August.