UPDATE 4-Oil up before expected extension of OPEC output cut

* OPEC, other producers meet on Thursday to discuss output cut

* Current production curb was only for first half of 2017

* Cut expected to be extended into 2018

* Rising U.S. output threatens to undermine OPEC-led cuts (Updates throughout, changes dateline, previous SINGAPORE)

LONDON, May 25 (Reuters) - Oil prices rose on Thursday ahead of an OPEC meeting expected to extend production cuts into 2018 in an attempt to drain a global glut that has depressed markets for almost three years.

Brent crude oil was up 40 cents at $54.36 a barrel by 0730 GMT. U.S. light crude was 40 cents higher at $51.76. Both benchmarks have climbed more than 15 percent from May lows on expectations of an extension.

The Organization of the Petroleum Exporting Countries and other producers, including Russia, meet in Vienna on Thursday and are widely expected to agree to extend a cut in oil supplies by 1.8 million barrels per day (bpd).

OPEC's current deal, agreed at the end of last year, only covers the first half of 2017.

The group will probably extend the cuts for another nine months until March 2018, four OPEC delegates said on Thursday as they gathered in Vienna. One delegate said a 12-month extension was still an option.

James Woods, analyst at Rivkin Securities, said an extended production cut was already "factored into the price of oil," adding that it was unlikely that a deeper cut would be announced at this stage.

"OPEC officials prefer ... to wait and see the impact of an extension in helping rebalance the market prior to taking any more drastic actions," Woods said.

Energy consultancy Wood Mackenzie said a nine-month extension "would have little impact on our price forecast for 2017, which is for an annual average of $55 a barrel for Brent."

It estimated that a nine-month extension would result in a 950,000 bpd production increase in the United States, undermining OPEC's efforts.

U.S. oil production <C-OUT-T-EIA> has already risen by more than 10 percent since mid-2016 to over 9.3 million bpd as drillers take advantage of higher prices and the supply gap left by OPEC and its allies.

Should the meeting in Vienna result in a cut extension to cover all of 2018, Wood Mackenzie said the tighter market could push average 2018 Brent prices up to $63 per barrel.

Brent has averaged $53.90 per barrel so far this year.

The OPEC cuts have enabled U.S. drillers to export more, especially to Asia. Shipping data in Thomson Reuters Eikon showed that more than 200,000 bpd of U.S. crude went to Asia on average in the first four months of the year. (Additional reporting by Henning Gloystein in Singapore; editing by David Clarke)