* Saudi plans to cut an extra 1 million bpd in Feb and March
* U.S. crude stockpiles expected to drop for fifth week
* Coming up: API oil supply report, 2130 GMT (New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON)
By Laura Sanicola
NEW YORK, Jan 12 (Reuters) - Oil hit an 11-month high just below $57 a barrel on Tuesday, bolstered by Saudi Arabia's plans to limit supply, offsetting worries that rising coronavirus cases globally would curtail fuel demand.
Brent crude LCOc1 was up 90 cents, or 1.6%, at $56.56 a barrel by 1118 EST (1618 GMT) after touching its highest since last February at $56.75. U.S. West Texas Intermediate (WTI) CLc1 gained 82 cents, or 1.6%, to $53.07.
Saudi Arabia plans to cut output by an extra 1 million barrels per day (bpd) in February and March to keep inventories in check.
The Saudi cut is part of an OPEC-led deal in which most producers will hold output steady in February. Last year's record cuts from OPEC and its allies helped oil recover from historic lows reached in April. Some analysts believe the oil complex is underestimating supply levels.
"Storage at Cushing is only 10.2 million barrels below the all-time record high, so there is no problem with supply here in the U.S., but the complex is responding positively to this chatter about undersupply," said Bob Yawger, director of energy futures at Mizuho.
Oil also gained on expectations for a drop in U.S. crude stockpiles. Analysts expect crude inventories to fall by 2.7 million barrels for a fifth straight week of declines. EIA/S
The first of this week's two supply reports, from the American Petroleum Institute, is due at 4:30 p.m. EST (2130 GMT).
The market is also being supported by the prospect of increased economic stimulus in the United States. President-elect Joe Biden, who takes office on Jan. 20, has promised "trillions" in extra pandemic-relief spending.
However, oil price gains were capped by demand concerns as coronavirus cases rise around the world. authorities introduced new curbs in areas surrounding Beijing on Tuesday and Japan is to widen a state of emergency beyond Tokyo.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.