Oil prices hold gains after U.S. inventory drawdown

TOKYO, Aug 29 (Reuters) - Oil prices clung to gains on
Thursday after official data confirmed a big drop in U.S. crude
inventories, helping ease concerns about weakening demand, but
worries about wider economic growth held prices in check.
U.S. crude CLc1 was up by 6 cents, or 0.1%, at $55.84 a
barrel, while Brent crude was down 7 cents, or 0.1%, at $60.42 a
barrel by 0011 GMT after rising for two days. Oil prices rose
around 1.5 percent in the previous session.
U.S. crude oil inventories fell last week by 10 million
barrels, compared with analysts' expectations for a decrease of
2.1 million barrels, as imports slowed, the Energy Information
Administration said. EIA/S
U.S. gasoline stocks USOILG=ECI fell by 2.1 million
barrels, compared with analysts' expectations in a Reuters poll
for a 388,000-barrel drop.
Distillate stockpiles USOILD=ECI , which include diesel and
heating oil, fell by 2.1 million barrels, versus expectations
for a 918,000-barrel increase, the EIA data showed.
The crude drawdown confirms "that OPEC supply cuts are
effectively working by depleting U.S. reserves," said Stephen
Innes, managing partner at Valour Markets.
The Organization of the Petroleum Exporting Countries
(OPEC), Russia and other producers have been restraining supply
for most of the period since Jan. 1, 2017. The alliance, known
as OPEC+, in July renewed the pact until March 2020.
Still, concerns about a slowdown in U.S. and global economic
growth and the potential hit to oil demand are keeping prices in
check.
U.S. weekly crude production also rose 200,000 barrels per
day to a new record at 12.5 million bpd in the week to Aug. 23.
San Francisco Federal Reserve President Marly Daly said on
Thursday she believes the U.S. economy has "strong" momentum,
but uncertainty and a global growth slowdown are having an
impact. Daly was speaking to reporters after a speech in Wellington,
New Zealand and said she was in "watch and see" mode in
assessing the need for another U.S. interest-rate cut.
Global growth has been hit by the trade war between the
United States and China, which shows no signs of easing.
U.S. President Donald Trump said on Monday he believed China
was sincere about wanting to reach a trade deal, but concerns
arose on Tuesday after China's foreign ministry declined to
confirm a telephone call between the two countries on trade.