* OPEC oil output posts biggest drop since 2017 on Saudimove
* Oil volatile as markets roiled by Apple warning, U.S. data
* U.S. crude oil stocks fall 4.5 mln bbls -API (Updates with API data on U.S. crude stockpiles)
By Stephanie Kelly
NEW YORK, Jan 3 (Reuters) - Oil prices rose more than 1percent on Thursday in volatile trade, drawing support fromsigns that Saudi Arabia is cutting crude output but pressured byconcerns that slowing global economic growth could dent demand.
Brent crude LCOc1 futures gained $1.04 to settle at $55.95a barrel, a 1.89 percent gain. U.S. West Texas Intermediate(WTI) crude CLc1 futures rose 55 cents to settle at $47.09 abarrel, a 1.18 percent gain.
Prices traded in a wide range, with Brent hitting a sessionhigh of $56.30 a barrel and a low of $53.93 a barrel. WTI posteda session high of $47.49 a barrel and a low of $45.35 a barrel.
Supporting futures were signs of reduced supply from membersof the Organization of the Petroleum Exporting Countries. OPECoil supply fell in December by the largest amount in almost twoyears, a Reuters survey found, as top exporter Saudi Arabia madean early start to a supply-limiting accord while Iran and Libyaposted involuntary declines. urn:newsml:reuters.com:*:nL8N1Z33J5
OPEC led by Saudi Arabia, alongside allied producers led byRussia, agreed last year to rein in supplies starting fromJanuary after oil prices tumbled from above $86 on worries aboutsurging output.
"The Saudis are still spearheading a significant productioncut that became official this week. Thus far, strong adherenceto adjusted quotas appears a high probability," Jim Ritterbusch,president of Ritterbusch and Associates, said in a note.
But oil price gains were capped by concerns about afaltering global economy.
Tech giant Apple IncAAPL.O cut its sales forecast, citinga slowdown in China. urn:newsml:reuters.com:*:nL3N1Z236Y.N The news rattled U.S.equity markets and weighed on oil prices, which at times trackWall Street.
Weaker-than-expected U.S. factory data also added toeconomic worries.
"Oil is flip-flopping on concerns of supply and demand,"said Phil Flynn, an analyst at Price Futures Group in Chicago."It's really a battle between the supply situation, which looksto be tightening, versus the possibility that demand will dropoff."
U.S. oil and gas executives' outlook turned negative for thefirst time since the low point of the last oil bust, accordingto results of a survey released on Thursday by the FederalReserve Bank of Dallas. urn:newsml:reuters.com:*:nL1N1Z30Z2
Investors have been concerned about rising supply from topproducers, including the United States and Russia.
U.S. crude stocks fell last week, while gasoline anddistillate inventories built, data from industry group theAmerican Petroleum Institute showed on Thursday.
Crude inventories fell by 4.5 million barrels in the weekended Dec. 28 to 443.7 million, compared with analysts'expectations for a decrease of 3.1 million barrels.
Gasoline stocks rose by 8 million barrels, compared withanalysts' expectations in a Reuters poll for a 2 million-barrelgain. Distillate fuels stockpiles rose by 4 million barrels,compared with expectations for a 1.6 million-barrel gain, theAPI data showed.
Official U.S. government data is due to be released onFriday.
Riyadh was expected to cut February prices for heavier crudegrades sold to Asia due to weaker fuel oil margins whilereducing prices for light grades to keep Saudi oil competitiveagainst rising U.S. shale oil supplies, a Reuters survey showedon Thursday. urn:newsml:reuters.com:*:nL3N1Z31B2urn:newsml:reuters.com:*:nL3N1Z31B2
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.