UPDATE 7-Oil hits 3-month high on falling oil stocks, investor optimism

* U.S. crude stocks fall by 5.5 million barrels -EIA
* China's industrial profits grow at fastest in 8 months
* Russia says OPEC+ may consider ending oil output cuts in
2020

(Updates with settlement prices, adds Baker Hughes rig count)
By Collin Eaton
HOUSTON, Dec 27 (Reuters) - Oil prices rose to the fourth
consecutive weekly gain on Friday, steadying at three-month
highs after new data showed U.S. crude inventories fell far more
than expected, while upbeat economic data and optimism over a
U.S.-China trade deal fueled a year-end stock market rally.
Brent crude LCOc1 rose 24 cents to settle at $68.16 a
barrel, the highest since mid-September. The international
benchmark has climbed nearly 27% since the end of 2018.
West Texas Intermediate CLc1 rose 4 cents to settle at
$61.72 a barrel, another three-month high. The U.S. benchmark
has risen 36% so far this year.
U.S. crude stocks fell by 5.5 million barrels in the week to
Dec. 20 to 441.4 million barrels, according to the Energy
Information Administration, far exceeding analysts' expectations
of a 1.7 million-barrel drop. "Inventories are bullish almost across the board," said Josh
Graves, senior market strategist at RJO Futures in Chicago.
A year-end stock market rally also helped lift oil prices as
consumer sentiment continued to improve, he said.
"It's a Santa Claus rally. People tend to buy more things
that will indirectly drive the price of oil up," Graves said.
U.S. stock indexes rose slightly on Friday, with the S&P 500
index .SPX close to logging its best year since 1997. The
Nasdaq .IXIC crossed the 9,000 point mark for the first time
on Thursday.
U.S. energy firms idled eight working oil rigs, the first
reduction in three weeks, as producers followed through on plans
to slash spending, energy services firm Baker Hughes Co BRK.N
said in its closely followed report on Friday. Oil trade was thin. But oil-market sentiment improved as new
data showed profits at China's industrial firms rose at the
fastest pace in eight months in November, according to the
National Bureau of Statistics. In the United States, a survey showed on Thursday online
holiday purchases by U.S. consumers reached a record, beating
analysts' expectations and lifting U.S. stocks to fresh highs.
MKTS/GLOB
China and the United States cooled their 17-month trade war
earlier this month, announcing a Phase 1 agreement that would
reduce some U.S. tariffs.
The Organization of the Petroleum Exporting Countries and
its allies including Russia, known as OPEC+, this month decided
to prolong an oil output restriction deal until the end of March
and to deepen the cuts in order to balance out the oil market.
But OPEC+ may consider wrapping up their oil output
reduction in 2020, Russian Energy Minister Alexander Novak said
on Friday.