The Organization of the Petroleum Exporting Countries cut crude output in December, a Reuters survey showed, and the American Petroleum Institute (API) reported a 4.5 million-barrel drop in crude inventories.

Brent crude, the global benchmark, was up $1.25 to $57.20 a barrel at 1113 GMT. US crude oil was up 90 cents at $47.99.

"Recent Chinese data is not confirming the doom-and-gloom trend," said Olivier Jakob, oil analyst at Petromatrix. "And you've got OPEC cutting."

China's services sector extended its solid expansion in December, a private survey showed on Friday, bucking a trend of downbeat economic data.

Both oil benchmarks are on track for solid gains in the first week of 2019 trading despite rising concerns that the China-US trade war will lead to a global economic slowdown.

But in comments that helped oil to rally, China's commerce ministry said it would hold vice-ministerial trade talks with US counterparts in Beijing on Jan. 7-8.

The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods and raising concern of slowing growth.

Despite the demand-side worries, oil has received some support as supply cuts announced by the global coalition of producers known as OPEC+ kick in.

OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million barrels per day (bpd) in 2019. OPEC's share of that cut is 800,000 bpd.

The Reuters survey on Thursday found OPEC supply fell by 460,000 bpd in December, following assessments by Bloomberg and JBC Energy also showing a sizeable decline.

The focus now will be on whether producers deliver further curbs in January to implement the deal fully. Iraq, a laggard in reducing production in the last OPEC cutback, said on Friday it would stick to the new accord.

"The market is likely to take some comfort from the fact that crude oil production from the OPEC+ will continue to drop," said Ole Hansen of Saxo Bank.

"Sentiment, however, is weak with (US President Donald) Trump's trade war with China a major hurdle."