By Sarah McFarlane 

-- Oil prices rose to an eight-week high on Friday, bolstered by hopes for a resolution to the U.S.-China trade dispute and signs of slowing global crude production.

-- Light, sweet crude for February delivery rose 3.3% to $53.80 a barrel on the New York Mercantile Exchange, closing at the highest level since Nov. 21.

-- Brent, the global benchmark, gained 2.5% to $62.70 a barrel.

Highlights

Trade Dispute: The U.S. is debating rolling back tariffs on Chinese imports in an effort to calm markets and progress trade talks. The trade dispute has raised uncertainty over global economic-growth prospects, with a knock-on effect to oil's demand-growth outlook. The Dow Jones Industrial Average and the S&P 500 were both up about 1.5% on Friday.

OPEC Cuts: The Organization of the Petroleum Exporting Countries lowered its oil production in December by 590,000 barrels a day, according to the International Energy Agency. That put its production levels at the lowest since July. The drop was driven by Saudi Arabia, OPEC's de facto head and the world's largest crude exporter. Global oil inventories remained just above their five-year average in November, despite falling 2.5 million barrels on the month, to stand at 2.857 billion barrels, the IEA said in its monthly report Friday. "The December [inventories] figure will be more interesting given there was quite a sharp drop in OPEC output last month," said Caroline Bain, commodities economist at consulting firm Capital Economics.

U.S. Production: The number of active oil rigs in the U.S. fell by 21 in the latest week to 852, the lowest level in eight months, according to data from Baker Hughes. The latest report suggested that the fall in oil prices was taking a toll on U.S. oil producers and pushing them to cut back on output.

Insight

Russia cuts lag: Members of OPEC and its allies including Russia started cutting output this month after agreeing in early December that action was needed after oil markets lost about a third of their value in two months. While OPEC's exports began to fall sharply in December, ahead of the agreement's implementation, Russia appears to be lagging; its production hit a fresh record last month, analysts said. "The non-OPEC heavyweight is supposed to trim output by 228,000 barrels a day starting this month, yet it has thus far reduced supply by a paltry 30,000 barrels a day," said Stephen Brennock, analyst at brokerage PVM.

--Stephanie Yang and Christopher Alessi contributed to this article.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

(END) Dow Jones Newswires

January 18, 2019 16:21 ET (21:21 GMT)