CORRECTED-UPDATE 1-Oil gains after U.S.-China trade deal, fall in inventories

(Corrects headline to say fall in inventories, rather than
rise)
By Aaron Sheldrick
TOKYO, Jan 16 (Reuters) - Oil prices rose on Thursday after
the signing of an initial Sino-U.S. trade deal that sets the
stage for a surge in Chinese purchases of American energy
products, while U.S. crude inventories fell more than expected.
Brent LCOc1 was 45 cents, or 0.7%, higher at $64.45 a
barrel by 0310 GMT, while U.S. crude was up by 39 cents, or
0.7%, at $58.20 a barrel.
Under the so-called Phase 1 deal to call a truce in a trade
war between the world's two biggest economies, China committed
to buying over $50 billion more of U.S. oil, liquefied natural
gas and other energy products over two years. "It was a formal signing of something which had already been
agreed, but that has certainly boosted sentiment," said Virendra
Chauhan, oil analyst at Energy Aspects.
Trade sources and analysts said China could struggle to meet
the target and gains in oil are likely to be limited ahead of
more detail on how the commitments will be achieved.
Official U.S. data showing a much bigger than expected drop
in crude oil inventories, also helped underpin prices, Chauhan
said.
"They were slightly constructive. We saw a counter-seasonal
draw in U.S. crude stocks and that generally is supportive," he
said.
Oil inventories fell by 2.5 million barrels, compared with
analyst expectations of a drop of 500,000 barrels, according to
data from the Energy Information Administration (EIA), an agency
of the U.S. Department of Energy. EIA/S
Nonetheless, gasoline stocks rose by 6.7 million barrels and
distillate stocks were up by 8.2 million barrels, according to
the EIA.
U.S. crude production also rose to a record 13 million
barrels per day, the agency said.
Oil prices are returning to range trading, analysts said, as
the threat of conflict between Iran and the U.S. receded further
after they traded missile and drone attacks earlier this month.
That sent Brent to highs above $71 a barrel, before prices
touched more than one-month lows in advance of the signing of
the U.S.-China deal.

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CHART: Brent oil may test resistance at $64.67 China to ramp up U.S. energy purchases https://tmsnrt.rs/2TtGOhs
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