By Kevin Baxter

Oil continued to rally on Tuesday, as investors bet that OPEC members will reach a deal to cut crude production.

The January contract for global crude benchmark Brent was up 1.53% at $49.67 a barrel while its U.S. counterpart West Texas Intermediate was up 1.31% at $48.37 a barrel.

The positive sentiment came amid a pre-summit meeting for the Organization of the Petroleum Exporting Countries in Vienna which spurred investor's hopes that the cartel could reach a consensus on cuts by as early as later on Tuesday. The cartel's main meeting is Wednesday next week.

A Nigerian delegate told The Wall Street Journal that sticking points remain, such as discrepancies between independent data on production used by the group and members' own disclosures and Iran's plans to boost output, which has scuttled past efforts to reach a deal.

While many market observers do now believe that there will be an agreement to cut production, others are less sure.

Dominick Chirichella from the New York-based Energy Management Institute believes that there is still only a 50% chance that OPEC will make any meaningful cuts to output. He said in a research note that despite all the "jawboning," no new information has entered the market since last week.

Commerzbank predicts that proposed cuts will come from Saudi Arabia and its Gulf allies, on the condition that other members don't ramp up their output. It added that only Iraq was in any position to ramp up supply, making reaching an accord a realistic prospect. However, it also warned market players not to get too carried away.

"No groundbreakingagreement on production caps or cuts should be expected from the OPEC meeting," the German bank said in a note.

The oil price is also been helped as heavy storms in Europe close down much of the continent's wind power generation. Marex Spectron said in a research note that this should drive greater oil consumption until the bad weather subsides.

Tuesday will also see the publication of the U.S. crude oil inventory forecast from the American Petroleum Institute. The past few weeks have witnessed large stock builds and a repeat of this trend could hit prices later Tuesday.

Nymex reformulated gasoline blendstock futures--the benchmark gasoline contract--rose 2.13% to

$1.43 a gallon, while December diesel traded at $1.56, up 1.63%.

ICE gasoil futures changed hands at $453.25 a metric ton, up 1.4%.

Benoit Faucon contributed to this article.

Write to Kevin Baxter at

(END) Dow Jones Newswires

November 22, 2016 06:38 ET (11:38 GMT)

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