UPDATE 10-Oil rises nearly 3% as Saudi signals OPEC deal extension, stocks rally

* WTI and Brent off five-month lows hit this week
* Brent posts third weekly decline, WTI up
* Saudi energy minister says OPEC close to agreeing pact
extension
* Wall Street rallies on rate cut hopes, trade optimism
* U.S. oil rig count falls to lowest since Feb 2018-Baker
Hughes

(Adds CFTC data)
By Stephanie Kelly
NEW YORK, June 7 (Reuters) - Oil prices rose nearly 3% on
Friday, climbing further from five-month lows hit this week,
after Saudi Arabia said OPEC was close to agreeing to extend an
output production cut beyond June and as Wall Street rallied.
Brent crude LCOc1 futures gained $1.62, or 2.6%, to settle
at $63.29 a barrel. U.S. West Texas Intermediate (WTI) crude
CLc1 ended at $53.99 a barrel, up $1.40, or 2.7%.
Brent posted its third weekly decline, dropping nearly 2%,
while WTI gained about 1% for the week. On Wednesday both
benchmarks hit their lowest since January.
Saudi Energy Minister Khalid al-Falih told a conference in
Russia that the Organization of the Petroleum Exporting
Countries (OPEC) and its allies should extend oil production
cuts. He said that while OPEC was close to agreement, more talks
were needed with non-OPEC countries that were part of the deal
to reduce output by 1.2 million barrels per day (bpd), which
runs out at the end of this month.
Supply has also been limited by U.S. sanctions on oil
exports from Venezuela and Iran. On Thursday, Washington
tightened pressure on Venezuela's state-owned oil company by
making clear that exports of diluents by international shippers
could be subject to sanctions. In the United States, energy firms this week reduced the oil
rig count to the lowest since February 2018. Drillers cut 11
rigs in the biggest weekly decline since April, bringing the
total count down to 789, General Electric Co's GE.N Baker
Hughes energy services firm said. Oil prices were also supported by a rise in equity markets
after a sharp slowdown in U.S. job growth raised hopes of an
interest rate cut by the Federal Reserve. .N
"What we've seen is global central banks are ready to
respond to a slowdown in the economy," said Phil Flynn, an
analyst at Price Futures Group in Chicago. "In the U.S., if
that's the case, we're going to see more stimulus added to the
market."
But investors are still worried about trade tensions that
could stall the global economy, including the dispute between
the United States and China.
The United States has also threatened tariffs on goods from
major trading partner Mexico. U.S. President Donald Trump said
on Friday there was a "good chance" the United States would make
a trade deal with Mexico, but that if the two countries failed
to make an agreement a 5% tariff would be imposed on Mexican
imports on Monday. Because of weak economic data and the widening trade
conflict, Commerzbank revised their third-quarter forecast for
Brent down to $66 from $73 a barrel.
Hedge funds and other money managers cut their net long U.S.
crude positions last week as prices plunged, the U.S. Commodity
Futures Trading Commission (CFTC) said on Friday. The speculator group cut its combined futures and options
position in New York and London by 13,196 contracts to 198,884
during the week to June 4.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-U.S. oil drilling, production & storage levels png https://tmsnrt.rs/2DxgF8W
TECHNICALS-U.S. oil may bounce to $54.48 oil may rise into $63.19-$63.99 range
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>