Oil rises another 3 percent as BP cuts spending, adding to signs of production cuts

IndustriesAssociated Press

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.

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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.