Oil jumps 2 percent on expectations of production cuts

Oil prices rose more than 2 percent on Tuesday, extending gains ahead of expected output cuts by producer cartel OPEC and a mandated reduction in Canadian supply.

Brent crude oil LCOc1 rose $1.55 or 2.5 percent to a high of $63.24 by 0955 GMT. U.S. light crude CLc1 was $1.25 higher at $54.20.

Both benchmarks climbed around 4 percent on Monday after U.S. President Donald Trump and Chinese President Xi Jinping agreed at a meeting of the Group of 20 industrialized nations (G20) to pause an escalating trade dispute.

“The market seems positively oriented following the G20 developments and heading into the OPEC meeting on Thursday,” BNP Paribas commodities strategist Harry Tchilinguirian told Reuters Global Oil Forum.

“A commitment by Russia to cooperate with Saudi Arabia and achieve an agreement at the next OPEC meeting has certainly lifted spirits,” he added.

The Middle East-dominated Organization of the Petroleum Exporting Countries will meet on Thursday in Vienna to agree future output and will discuss strategy with other producers outside OPEC, including Russia.

OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million barrels per day (bpd), OPEC sources have told Reuters, adding that they were still talking to Russia about the extent of its production cuts.