SINGAPORE (Reuters) – Oil prices rose by around 1 percent on Tuesday amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook may soon weigh on growth in fuel demand.

International Brent crude oil futures LCOc1 were at $59.62 per barrel at 0740 GMT, up 63 cents, or 1.1 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.14 per barrel, up 63 cents, or 1.3 percent.

“OPEC-led cuts and declining U.S. rig counts have bolstered market sentiment in the New Year,” Singapore-based brokerage Phillip Futures said on Tuesday.

The Middle East-dominated producer club of the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC allies, including Russia, agreed in late 2018 to cut supply to rein in a global glut.

In the United States, the amount of rigs looking for new oil production has dropped from a 2018-peak of 888 to a still high number of 873 in early 2019, pointing to a potential dent in production growth which was at more than 2 million barrels per day (bpd) last year, bringing American crude output to a record 11.7 million bpd C-OUT-T-EIA.

Meanwhile, the United States last November re-imposed sanctions against Iran’s oil exports. Although Washington granted sanctions waivers to Iran’s biggest oil customers, mostly in Asia, the Middle Eastern country’s exports have plummeted since.

“Iranian exports have already fallen sharply and are likely to remain at around 1.3 million barrels per day (bpd) in 2019, 1.3 million bpd down vs their 1H18 average,” HSBC said in its 2019 oil market outlook.

However, Japan expects to restart oil imports from Iran within this month, the Nikkei business daily reported on Tuesday, with some Japanese banks notifying customers they will resume transactions for oil purchases.

South Korea is already expecting to receive Iranian oil imports in January after a four-month interruption.

On the demand-side, an economic slowdown is looming over oil and financial markets.

China’s National Development and Reform Commission (NDRC) on Tuesday signaled it may roll out more fiscal stimulus measures to stem a further economic slowdown.

Tuesday’s oil price increases came after crude futures fell by more than 2 percent the previous session, dragged down by weak Chinese trade data which pointed to a global economic slowdown.

“The outlook for the global economy continues to be highly uncertain,” HSBC said.

The bank said it had cut its average 2019 Brent crude oil price forecast by $16 per barrel, to $64 per barrel, citing surging U.S. production and an “increasingly uncertain demand backdrop”.

(For a graphic on ‘U.S. oil production, drilling & storage levels’ click tmsnrt.rs/2GVNTmb)