SINGAPORE: Oil prices rose by 1 percent on Friday after a report from the Organization of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month, easing fears about prolonged oversupply.

A report by the Wall Street Journal on Thursday saying that Washington was considering lifting some or all tariffs imposed on Chinese imports also buoyed financial markets, including oil, analysts said.

U.S. West Texas Intermediate (WTI) crude futures were at $52.70 per barrel at 0605 GMT, up 63 cents, or 1.2 percent, from their last settlement.

International Brent crude oil futures were up 66 cents, or 1.1 percent, at $61.84 per barrel.

OPEC, along with some other producers including Russia, cut oil output sharply in December before a new accord to limit supply took effect on Jan. 1, it said on Thursday, suggesting that producers have made a strong start to averting a glut in 2019 as a slowing economy curbs demand.

OPEC said in its monthly report that its oil output fell by 751,000 barrels per day (bpd) in December to 31.58 million bpd, the biggest month-on-month drop in almost two years.

Some focus is shifting to whether the United States tightens sanctions against OPEC-member Iran when waivers it granted the Middle Eastern nation’s eight biggest crude customers last November expire.

China, India, Japan, South Korea, Turkey, Italy, Greece and Taiwan received exemptions from Washington that allow them to import oil from Iran until April or May.

Political risk advisory Eurasia Group said China, India, Japan, South Korea and Turkey are likely to receive extended waivers, while those for Italy, Greece and Taiwan would likely be removed, capping Iran’s crude oil exports at about 1.1 million bpd.

“The combination of production cuts by OPEC+ (especially the Saudis) and tightening sanctions on Iranian oil exports have brought the market close to balance,” U.S. investment bank Jefferies said on Friday.

Tempering support for prices, however, is weakening demand. OPEC cut its forecast for average daily demand for its crude in 2019 to 30.83 million bpd, down 910,000 bpd from the 2018 average.

Further undermining OPEC’s efforts to tighten oil markets has been a surge in crude output from the United States, which increased by more than 2 million bpd in the last year to an unprecedented 11.9 million bpd.