JAKARTA, Dec 17: Malaysian palm futures rose more than 2 per cent on Wednesday, boosted by a rally in crude oil, sparked by expectations OPEC will agree a deep cut in oil output to rescue prices.

The benchmark March palm oil contract on the Bursa Malaysia’s Derivatives Exchange rose 35 ringgit, or 2.27 per cent, to 1,580 ringgit ($448) per ton.

Other traded contracts rose between 34 and 55 ringgit. The overall volume was thin at 6,905 lots of 25 tons each.The expectation of an Opec output cut led to short-covering towards the close, said a trader at a Malaysian brokerage.

Palm futures had lost nearly 7 per cent in the previous three sessions.

Oil rose by more than $1 on Wednesday ahead of an Opec meeting in Algeria widely expected to announce a big cut in production to halt a slide in oil prices.

US light crude for January delivery , due to expire on Friday, rose $1.42 to $45.02 by 1046 GMT after having fallen to a low of $42.56 in the previous session.

Oil ministers from the Organization of the Petroleum Exporting Countries were near a consensus to cut output by 2 million barrels per day (bpd), the biggest reduction ever by the producer group.

Palm oil tends to track crude oil moves as rival vegetable oils such as rapeseed and soyaoil are increasingly used as a feedstock for biodiesel.

In Indonesia, the world’s largest palm producer, palm prices rose tracking Malaysian palm futures.

The state marketing centre in Jakarta sold 3,500 tons out of 5,500 tons of palm oil it offered in an auction at a top price of 5,246 rupiah ($0.48) per kg, up from 5,199 rupiah on Tuesday.

Meanwhile, refiners in Jakarta sold refined, bleached, deodorised (RBD) palm oil, used as cooking oil, at 5,800 rupiah per kg, down slightly from 5,900 rupiah per kg on Tuesday.

In the Malaysian physical market, crude palm oil for delivery in December was traded at 1,565-1,580 ringgit a ton in the southern region and 1,550-1,570 ringgit a ton in the central region.

—Reuters