UPDATE 7-Oil prices jump 5% on OPEC+ output talks, Iran tension

* Saudi Arabia offers voluntary oil cut in February -sources
* OPEC+ nearing compromise on holding oil output steady
-sources
* Iran seizes S. Korean-flagged chemical tanker
* Coming Up: API data on U.S. oil stocks at 4:30 p.m/2130
GMT

(Updates prices, market activity)
By Stephanie Kelly
NEW YORK, Jan 5 (Reuters) - Oil prices climbed more than 5%
on Tuesday after news that Saudi Arabia will make voluntary cuts
to its oil output in February, while tension simmered following
Iran's seizure of a South Korean vessel.
Brent crude futures LCOc1 rose $2.62, or 5.1%, to $53.71 a
barrel by 1:24 p.m. EST (1824 GMT). U.S. West Texas Intermediate
crude CLc1 rose $2.51, or 5.3%, to $50.13 a barrel.
Two sources from OPEC+ producers said Saudi Arabia would cut
output by more than 400,000 barrels per day (bpd) in the next
two months on top of its existing cuts. The cuts are part of a
deal to persuade most producers from the group consisting of the
Organization of the Petroleum Exporting Countries and allies, to
hold output steady amid concerns that new coronavirus lockdowns
will hit demand. "If the Saudis are going to shoulder the load and take oil
off the market, that changes the dynamic quite a bit," said Phil
Flynn, senior analyst at Price Futures Group in Chicago. "It
looks like the Saudis are taking the role as the global swing
producer."
OPEC+ resumed talks on Tuesday after reaching a deadlock
over February oil output levels this week.
An OPEC document dated Jan. 4 showed the group was studying
a range of scenarios including more production, no change or
cutting output by 500,000 bpd in February. "It is no secret that the bullish kick which crude markets
have received through much of the last quarter (crude rose
almost 30% in Q4) and again this morning is supported by a
particularly hands-on approach from OPEC+ to tighten crude
markets and bring inventories lower through 2021," JBC Energy
analysts said in a note.
Tensions around OPEC member Iran's seizure of a South Korean
vessel continued, as Iran said the Asian country owed it $7
billion. Still, bearish elements loom for the market. England began a
new lockdown on Monday as its coronavirus cases surged.
Coronavirus lockdowns have weighed on fuel demand since early
last year.