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What’s the Next Stop for Crude?

Brent crude oil rose more than $1 to a 12-week high on Thursday after news of a sharp cut in Saudi oil production, an explosion in Yemen that halted most of the country's oil exports and bullish Chinese trade data.

Oil rigs in the South China Sea.
Paul & Paveena McKenzie | Oxford Scientific | Getty Images
Oil rigs in the South China Sea.

Saudi Arabia cut its crude oil production by about 700,000 barrels per day (bpd) over the last two months of last year, with December output at around 9 million bpd, an industry source familiar with Saudi oil policy said.

The world's largest oil exporter produced 9.025 million bpd in December, down from 9.49 million bpd in November and more than 1 million bpd below its peak production last summer.

Flows of oil through Yemen's main crude export pipeline stopped on Thursday after it was blown up by unknown attackers, government and oil industry officials said.

On the demand side, strong Chinese trade data raised expectations that an economic recovery in the world's second-biggest oil consumer would drive fuel consumption higher.

Brent crude rose $1.53 to a high of $113.29, its highest since Oct. 18, before easing back to trade about 0.5 percent higher at $112. U.S. crude last rose 1 percent to trade at about $94 a barrel.

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