(Corrects headline and first paragraph to reflect four-month
high, not five-month)
* Russia, Saudi Arabia agree on oil output freeze -report
* U.S. crude inventories expected to rise this week
* Brent, U.S. crude move through 200-day moving averages
By Catherine Ngai
NEW YORK, April 12 (Reuters) - Global oil prices hit
four-month highs on Tuesday, hovering just under $45 a barrel
after a report that top producers Russia and Saudi Arabia have
agreed to freeze output ahead of a much-anticipated producers
meeting on Sunday.
Russia's Interfax news agency quoted a diplomatic source in
Doha saying that Russia and Saudi Arabia reached a consensus on
Tuesday about an output freeze and that the final decision will
not depend on Iran.
The output freeze news came as the U.S. government said that
U.S. crude output was forecast to fall by 560,000 barrels per
day in 2017 to 8.04 million bpd, underscoring that the 21-month
price rout is picking up steam. EIA/S
"People are now realizing that this OPEC meeting could be a
historic turning point for the market," said Phil Flynn, an
analyst at Price Futures Group. "Now, with U.S. production cuts,
our sense is that we're entering a new cycle upwards."
Brent crude LCOc1 prices were up $1.70, or 4 percent, at
$44.53 a barrel by 1:45 p.m. EDT (1745 GMT).
U.S. crude CLc1 was up $1.63, or 4.04 percent, at $41.99 a
barrel.
Oil markets were already boosted ahead of an OPEC member
meeting with outside producers in Doha, Qatar, on Sunday, but
the comments fueled hopes that oil producers will agree on steps
to tackle a supply glut.
Still, some analysts remained skeptical. While the market
was being driven higher on a global supply-demand rebalancing,
the threat of record-high inventory levels and producers
increasing output once prices rebound continued to loom.
"The market appears to be taking a lot of support from
positive statements. But, this isn't the first time the Russians
have come out and made remarks related to a production freeze
being imminent," said Gene McGillian, a senior analyst at
Tradition Energy.
McGillian added that Iran's participation in the output
freeze would be crucial for a more meaningful discussion
regarding supply cuts.
Brent and U.S. crude moved through their 200-day moving
averages, which stood at $43.54 for Brent, potentially putting
the market on a firmer technical footing.
Industry group the American Petroleum Institute is scheduled
to release its report on Tuesday at 4:30 p.m. EDT (2030 GMT).
U.S. commercial crude oil inventories likely rose last week, a
preliminary Reuters poll showed on Monday. EIA/S
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GRAPHIC on U.S. rig counts http://graphics.thomsonreuters.com/15/rigcount/index.html
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