Oil prices hold near 3-month highs on U.S.-China trade deal progress

* Brent, WTI hover near highest levels since mid-September
* Both benchmarks heading for third consecutive weekly rise
* Thaw in U.S.-China trade tensions boosts oil demand
prospects
* U.S. crude inventories fell 1.1 mln bbls last week - EIA

By Jane Chung
SEOUL, Dec 20 (Reuters) - Oil prices held steady near
three-month highs on Friday on the back of easing Sino-U.S.
trade tensions that have weighed on demand as well as the global
economic growth outlook.
Brent futures LCOc1 rose 2 cents, or 0.03%, to 66.56 a
barrel by 0145 GMT, while U.S. West Texas Intermediate crude
CLc1 was down 9 cents, or 0.15%, at $61.09 per barrel.
Both benchmarks were still on track for a third consecutive
weekly rise.
Progress in a long-running trade dispute between the United
States and China, the world's two biggest oil consumers, has
boosted expectations for higher energy demand next year.
China on Thursday announced a list of import tariff
exemptions for six oil and chemical products from the United
States, days after the world's two largest economies announced
an interim trade deal. "A world with less uncertainty (following last week's
proposed U.S.-China trade agreement) was the real driver of the
market optimism on the 2020 outlook," ANZ Research said in a
note.
JP Morgan and Goldman Sachs raised its 2020 oil price
outlook earlier this week amid OPEC-led output cuts and an
improved global trade outlook. The Organization of Petroleum Exporting Countries (OPEC) and
its allies including Russia agreed in early December to make a
further cut of 500,000 barrels per day (bpd) from Jan. 1 on top
of previous reductions of 1.2 million bpd.
The trade deal progress aside, a drop in U.S. crude
inventories also supported oil prices to hold near three-month
highs.
U.S. crude oil stockpiles fell by 1.1 million barrels to
446.8 million barrels in the week to Dec. 13, the Energy
Information Administration (EIA) said on Wednesday. EIA/S
ANZ Research also said "an expected fall in U.S. drilling
activity should support oil prices."
A U.S. weekly drilling report by energy services firm Baker
Hughes Co BKR.N is due to be released on Friday. U.S. drilling
firms added 4 oil rigs in the week to Dec. 13, bringing the
total count to 667. RIG/U

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
China announces new tariff exemptions for U.S. chemical, oil
products Morgan raises 2020 oil price view on OPEC+ cuts, improved
economic outlook Sachs raises 12-month commodity returns forecast
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>