Oil prices surge again on signs companies cut production

The Associated Press
A BP logo is seen above fuel prices outside a petrol station in the town of Bletchley in Buckinghamshire, England, Thursday, Jan. 15, 2015. BP has announced it will cut an estimated 200 staff jobs and another 100 contracting jobs in light of falling oil prices. The company said Thursday the cuts will be made in onshore roles, not in offshore operational positions. Regional president Trevor Garlick said BP remains committed to its North Sea operations but needs to take "specific steps" given the challenging economic environment. (AP Photo/Matt Dunham)
Copyright 2015, The Associated Press

NEW YORK (AP) — Oil rose again Tuesday as oil giant BP announced plans to cut exploration spending, another sign that the recent plunge in prices will lead to cuts in global production.

U.S. oil rose $1.60, or 3.2 percent, to $51.17 a barrel, and has gained about 15 percent over three trading sessions. Brent crude, a benchmark for many international oils imported by U.S. refineries, rose $1.44, or 2.6 percent, to $56.18 a barrel.

The sudden rally follows a months-long decline that knocked oil prices down about 60 percent.

The gains began Friday with a report showing a sharp drop in the number of rigs in the U.S. drilling for oil. On Monday, BP announced a 20 percent drop in capital spending for this year. That follows Chevron's projected cut of 13 percent.

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