UPDATE 8-Oil rises to 11-month high, logs weekly gain on Saudi output cut

* Brent rises 8.1%, WTI up 7.7% in the week
* Rally in global equities also feeds appetite for risk
* U.S. drillers add oil rigs for 7th week in a row -Baker
Hughes
* Latest global lockdowns delay fuel demand recovery

(New throughout; updates prices, market activity and comments
to settlement)
By Laila Kearney
NEW YORK, Jan 8 (Reuters) - Oil prices hit their highest
level in nearly a year on Friday, gaining 8% on the week,
supported by Saudi Arabia's pledge to cut output and strong
gains in major equity markets.
Brent crude LCOc1 settled at $55.99 a barrel, climbing
$1.61, or 3%, on the day and 8.1% on the week. West Texas
Intermediate crude futures (WTI) CLc1 closed at $52.24 a
barrel, gaining $1.41, or 2.8%, also its highest since late
February. WTI posted a weekly gain of 7.7%.
Saudi Arabia this week pledged extra, voluntary oil output
cuts of 1 million barrels per day (bpd) in February and March as
part of a deal under which most OPEC+ producers will hold
production steady during new lockdowns. The kingdom, the de facto leader of the Organization of the
Petroleum Exporting Countries, was at odds with some other
producers that wanted to boost output to head off U.S. shale
companies from capturing more market share. Eventually, an
agreement was reached to allow Russia and others to boost output
while the Saudis restrict theirs.
"This week the Saudis stepped up to try to take over the
market and took ownership of getting prices stabilized," said
John Kilduff, partner at Again Capital LLC in New York. "It
seems like they're on a mission again to get prices back up."
The number of U.S. oil rigs rose for the seventh straight
week, gaining eight to 275 this week to its highest since May,
according to energy services firm Baker Hughes Co. RIG/U
Analysts said oil prices could see a correction in the
coming months if fuel demand remains constrained by the
pandemic. Strict restrictions on travel and other activity
around the world to contain a surge in COVID-19 cases are
weighing on fuel sales, weakening the prospect of an energy
demand recovery in the first half of 2021. The pandemic claimed its highest U.S. death toll yet this
week, killing more than 4,000 people in a single day, while
China reported its biggest rise in daily cases in more than five
months, while Japan may extend a state of emergency beyond the
greater Tokyo region. A global equities rally pushed Japan's Nikkei and U.S. stock
benchmarks to new records, as investors focused on further
stimulus to mend the economic damage of the
pandemic.
The U.S. Congress may soon approve more pandemic relief, a
scenario that became more likely after two Georgia Democrats won
Senate seats that handed Democrats control of both houses of
Congress once Biden is sworn in.
"The energy complex (is) placing particular focus on the
democratic victories in the Georgia elections that, in turn,
boost the likelihood of larger stimulus measures," said Jim
Ritterbusch of Ritterbusch and Associates.