* After 2 days, OPEC+ surprise with sizeable 1.2 mln bpd cut
deal
    * Reduction to last six months, be reviewed in April
    * OPEC, Russia & U.S. oil production: https://tmsnrt.rs/2QczFSp
    * U.S. drillers cut 10 rigs to 877 total this week- Baker
Hughes

 (Adds settlement prices)
    By Jessica Resnick-Ault
    NEW YORK, Dec 7 (Reuters) - Oil prices ended more than 2
percent higher on Friday after OPEC members and allies like
Russia agreed to reduce output to drain global fuel inventories
and support the market, but the gains were capped by concerns
that the cuts would not offset growing production.
    The Organization of the Petroleum Exporting Countries and
its Russia-led allies, referred to as "OPEC+," agreed to slash
production by a combined 1.2 million barrels per day next year
in a move to be reviewed at a meeting in April.
    This was larger than the minimum 1 million bpd that the
market had expected, despite pressure from U.S. President Donald
Trump to reduce the price of crude.  urn:newsml:reuters.com:*:nL8N1YC1JI
    OPEC will curb output by 800,000 bpd from January while
non-OPEC allies contribute an additional 400,000 bpd of cuts,
Iraqi Oil Minister Thamer Ghadhban said after the organization
concluded two days of talks in Vienna.
    The deal had hung in the balance for two days - first on
fears that Russia would cut too little, and later on concerns
that Iran, whose crude exports have been depleted by U.S.
sanctions, would receive no exemption and block the agreement.
    But after hours of talks, Iran gave OPEC the green light and
Russia said it was ready to cut more.
    Russia gave a commitment to reduce output by 228,000 bpd
from October levels of 11.4 million bpd, though it said the cuts
would be gradual and take place over several months.
    “Without cuts there would have been extreme downward
pressure on the market,” said John Paisie, executive vice
president at Stratas Advisors, a consultancy. 
    “I think the Saudis tried to walk a tightrope: they want to
make sure they maintain their relationship with the U.S., but
they also need to make some cuts because they need a higher oil
price to balance their budget."
    Brent crude  LCOc1  rose $1.61, or 2.7 percent, to settle at
$61.67 a barrel. In early trading, the global benchmark had
dropped below $60 when it looked as if the oil exporters might
leave output targets unchanged. It then rallied to a session
high of $63.73 on news of the agreement, before pulling back
late in the session.
    U.S. crude  CLc1  rose $1.12, or 2.2 percent, to $52.61 a
barrel, after earlier reaching a session high of $54.22. 
    U.S. crude was up 3 percent on the week and Brent was 4.8
percent higher.
    Oil prices have plunged 30 percent since October as supply
has surged and global demand growth has weakened.  urn:newsml:reuters.com:*:nL8N1Y105B
    While the announcement of the cuts initially sent prices
higher, some of the enthusiasm cooled, on fears that the cut
would not absorb new output coming online in the United States
that has made it the word's top producer.
    A 1.2 million-bpd cut, if implemented fully, "should be
enough to largely attenuate, but not eliminate, expected implied
global inventory builds in the first half of next year,” Harry
Tchilinguirian, global oil strategist at BNP Paribas in London
told the Reuters Global Oil Forum. 
    Given supply due to come online, some analysts and market
participants said the cut may not be sufficient to end oil's
rout. 
    “Relative to how big this looming supply tsunami is, it is
not nearly enough to prevent big inventory builds next year,”
said Robert McNally, president of Rapidan Energy Group in
Washington. “President Trump and President Putin prevented OPEC+
from cutting by more, which was certainly needed to put a sturdy
floor under prices. They are putting a fuzzy floor under
prices.”  urn:newsml:reuters.com:*:nL1N1YC10V
    Trump has asked OPEC to keep prices low, pleading with the
Saudis in twitter messages. Russia had initially balked at
cutting production alongside OPEC.  
    Output from the world's biggest producers - OPEC, Russia and
the United States - has increased by 3.3 million bpd since the
end of 2017 to 56.38 million bpd, meeting almost 60 percent of
global consumption.  PRODN-TOTAL   C-RU-OUT   C-OUT-T-EIA 
    The surge is mainly due to soaring U.S. oil production
 C-OUT-T-EIA , which has jumped by 2.5 million bpd since early
2016 to a record 11.7 million bpd.
    U.S. drillers this week cut oil rigs by the most in over two
years, after adding rigs in recent weeks, General Electric Co's
 GE.N  Baker Hughes energy services firm said in its closely
followed report.  RIG-OL-USA-BHI .  RIG/U  
    The rig count, an indicator of future production, fell by 10
oil rigs in the week to Dec. 7, the biggest weekly decline since
May 2016. Still, at 877, the count was higher than a year ago
when 751 rigs were active.    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC: OPEC, Russia & U.S. crude oil production    https://tmsnrt.rs/2QdhkVc
GRAPHIC: U.S. turns into net exporter of oil    https://tmsnrt.rs/2QiW7cA
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Additional Reporting by Julia Payne and Christopher Johnson in
London and Henning Gloystein in Singapore; Editing by Marguerita
Choy and Bernadette Baum)
 ((Jessica.Resnick-Ault@thomsonreuters.com; 646-223-6052;))