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Oil prices swung back into positive territory in early afternoon trading on Tuesday, following two reports that indicate the Opec-backed production cuts are working and may be extended and investors eye the weekly US petroleum report due Wednesday.

West Texas Intermediate, the US benchmark, was up 0.3 per cent after spending most of the morning in negative territory, to $53.25 a barrel. Brent, the global standard, also surged back from the red to break $56 a barrel.

The rise comes following two news reports indicating that production cuts agreed to by the Opec cartel and some non-Opec countries in an effort to shore up prices. Dow Jones reported that Saudi Arabia wanted Opec to extend the cuts, while Reuters, citing sources, said that Opec states had cut output more than pledged under the agreement in March.

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