UPDATE 7-Oil on track for highest since March after OPEC+ output cut deal

(Adds latest prices, on track for highest close since March)
By Scott DiSavino
NEW YORK, Dec 3 (Reuters) - Oil prices on Thursday were on
track to hit their highest closes since early March after
sources said OPEC and Russia agreed to a modest output increase
from January by 500,000 barrels per day.
The increase means the Organization of the Petroleum
Exporting Countries (OPEC) and Russia, a group known as OPEC+,
would move to cutting production by 7.2 million bpd, or 7% of
global demand from January, compared with current cuts of 7.7
million bpd. The OPEC+ producers, however, failed to find a compromise on
a broader and longer term policy for the rest of next year.
Brent LCOc1 futures rose 63 cents, or 1.3%, to $48.88 a
barrel by 1:01 p.m. EST (1801 GMT). U.S. West Texas Intermediate
(WTI) crude CLc1 rose 49 cents, or 1.1%, to $45.77.
That puts both benchmarks on track to close at their highest
levels since March 5 - before most countries imposed lockdowns
to stop the spread of coronavirus.
OPEC+ met on Thursday to work on policies for 2021 after
talks earlier in the week reached no conclusion on how to tackle
weak oil demand amid a new coronavirus wave.
OPEC+ had been widely expected to roll over oil cuts of 7.7
million bpd, or 8% of global supplies, at least until March
2021.
But after hopes for a speedy approval of COVID-19 vaccines
spurred a rally in oil prices at the end of November - Brent
futures gained 27% in November - some producers questioned the
need to tighten oil policy.
Those higher prices in November prompted U.S. producers to
boost output for a third week in a row last week for the first
time since June 2019, reaching 11.1 million bpd, according to
government data. EIA/S
"With U.S. oil output on the rise, OPEC+ couldn't allow the
Americans to win market share at their expense," said Edward
Moya, senior market analyst at OANDA in New York.
The premiums of front-month Brent LCOc1-LCOc13 and WTI
CLc1-CLc13 over the same month in 2022, meanwhile, reached
their highest since February 2020, signaling future price
uncertainty.
Four OPEC+ sources said the group would now gather every
month to decide on output policies beyond January and monthly
increases are unlikely to exceed 500,000 bpd.
Monthly meetings by OPEC+ will make price moves more
volatile and complicate hedging by U.S. oil producers.