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Crude oil futures ended sharply higher on Friday, lifted by recent data showing declines in crude output from OPEC. Traders also felt that Saudi Arabia's decision to increase the level of output reduction will significantly tighten crude supply in the market.

Expectations that the U.S.-China trade talks that will continue in Washington next week will help resolve the disputes between the two largest economies in the world and allay fears about energy demand pushed up oil prices.

West Texas Intermediate Crude oil futures for March ended up $1.18, or 2.2%, at $55.59 a barrel, a near 3-month high.

On Thursday, crude oil prices ended up $0.51, or about 1%, at $54.41 a barrel.

For the week, crude oil futures gained as much as 5.4%.

In January, OPEC cut output by nearly 800,000 barrels per day, just short of the proposed reduction of 812,000 barrels per day.

Earlier this week, Saudi Arabia said that it plans to produce around 9.8 million barrels per day of oil in March, more than half a million barrels per day below its pledged production level.

The partial closure of Safaniya offshore oil fields in Saudi Arabia too contributed to oil's uptick today.

Baker Hughes reported today that U.S. oil firms increased the number of oil rigs by three this week, bringing the total rig count to 857.

In its monthly report this week, the International Energy Agency warned that the global oil market will struggle to absorb fast-growing crude supply from outside the Organization of the Petroleum Exporting Countries.