Oil hovers near 11-mth highs, sustained by Saudi output cuts pledge

* Brent, WTI set for weekly gains of about 5%
* Record N. Sea cargoes trade on Platts amid Saudi cuts

By Yuka Obayashi
TOKYO, Jan 8 (Reuters) - Oil prices edged higher on Friday,
hovering near 11-month highs hit the previous day, as Saudi
Arabia's pledge to make voluntary cuts to its output continued
to buoy the mood in the market though worries over slower fuel
demand capped gains.
Brent crude LCOc1 climbed 2 cents to $54.40 a barrel by
0122 GMT, after closing slightly higher the previous day. It
touched $54.90 on Thursday, the highest since February.
U.S. West Texas Intermediate (WTI) CLc1 also gained 2
cents to $50.85 a barrel. The contract closed up 0.4% on
Thursday after also hitting its highest since February at
$51.28.
Both benchmarks are on track for gains of about 5% for this
week.
"Oil markets are expected to stay in a bullish tone toward
February on the back of Saudi's surprise promise to cut
production," said Kazuhiko Saito, chief analyst at commodities
broker Fujitomi Co.
Earlier this week Saudi Arabia, the world's biggest oil
exporter, said it would cut output by an additional 1 million
barrels per day (bpd) in February and March. On Thursday, seven North Sea crude cargoes were bought and
sold in the trading window operated by Platts, a record amount
that trade sources said may reflect tighter supply after the
surprise cut. "But concerns over slower demand in gasoline and other fuels
in the United States and other parts of the world due to wider
restrictions to contain spreading COVID-19 pandemic may limit
gains," said Fujitomi analyst Saito.
The raging pandemic claimed its highest U.S. death toll yet,
killing more than 4,000 people in a single day, while China
reported the biggest rise in daily cases in more than five
months. U.S. fuel inventories rose last week, with gasoline stocks
USOILG=ECI increasing by 4.5 million barrels, the biggest
increase since April, the Energy Information Administration said
on Wednesday. EIA/S
Still, the broadly upbeat mood in global equities, led by
Wall Street which hit record highs on Thursday, lent support to
oil prices as markets bet a new Democrat-controlled government
would lead to heavy spending and borrowing to support the U.S.
economic recovery.