UPDATE 8-Oil jumps 3% on U.S. stockpiles drop; further OPEC output cuts seen

* Brent and WTI gain more than 4%
* OPEC+ expected to extend supply curbs
* Graphic on U.S. petroleum stocks: https://tmsnrt.rs/35DZduT

(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Dec 4 (Reuters) - Oil prices surged more than 3%
on Wednesday on expectations that OPEC and allied producers
would extend production curbs, and as U.S. government data
showed a large drop in domestic crude stockpiles.
Brent crude LCOc1 futures ended the session up $2.18, or
3.6%, at $63 a barrel after climbing to as much as $63.51. U.S.
West Texas Intermediate (WTI) crude CLc1 futures settled up
$2.33, or 4.2%, at $58.43 after touching a session high of
$58.66 a barrel.
The Organization of the Petroleum Exporting Countries (OPEC)
and allies including Russia, a group known as OPEC+, could
approve deeper crude output cuts when they meet in Vienna this
week.
U.S. crude stocks fell by 4.9 million barrels in the week
to Nov. 29 as refineries hiked output, the Energy Information
Administration said, a much deeper draw than expected. Analysts
had forecast a decrease of 1.7 million barrels. EIA/S
"A jump in refining activity and ongoing subdued net imports
have helped yield the first draw to oil inventories in six
weeks," said Matt Smith, director of commodity research at
ClipperData.
Iraqi oil minister Thamer Ghadhban told reporters in Vienna
on Tuesday that "a deeper cut is being preferred by a number of
key members". On Wednesday, Ghadhban said he would support at
least extending existing cuts to end-2020 from March.
"We have to give a positive signal to the market and to me
at least we should roll over the present agreement," he said.
Some remained skeptical of whether OPEC+ will deepen cuts,
though many analysts expect an extension of the existing supply
pact.
OPEC members meet on Thursday, with the OPEC+ group meeting
the following day. OPEC+ has been curbing supply since 2017 and
is expected to keep the cuts in place to balance out record
production in the United States.
Prices briefly dipped after a report that Saudi Arabia is
threatening to boost oil production unilaterally if some OPEC
nations continue to defy the group's output curbs.
Oil prices had been held back by the uncertainty over
prospects for a trade deal between the United States and China.
The dispute between the world's two biggest economies has
weakened the global economy and limited oil demand growth.
Wall Street's main indexes rose for the first time in four
sessions, following a report that the United States and China
were moving closer to signing a phase-one trade deal.
U.S. President Donald Trump said on Wednesday that trade
talks with China were going "very well," sounding more positive
than he did a day earlier when he said a deal may have to wait
until after the 2020 election. "While we are starting to see signs of life in the global
economic recovery, slowing demand could easily warrant an OPEC
surprise this week," said Edward Moya, a senior market analyst
at OANDA in New York.
"The Saudis are all in doing what it needs to keep oil
prices firm ahead of the final pricing of the Aramco IPO."
Fitch Solutions said oil prices are likely to fall next year
as oil supplies keep rising, outweighing any pickup in growth.
It predicted Brent crude will drop to an average of $62 a barrel
in 2020 and $58 in 2021, from a $64 average this year.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART: Brent oil may bounce towards $61.77 again U.S. petroleum inventories https://tmsnrt.rs/35Hre4S
CHART: U.S. oil may test resistance at $56.68 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>