UPDATE 10-Oil rises further above $65 on trade hopes, supply cuts

* U.S.-China Phase 1 trade deal supports prices
* Fed's Kaplan says trade issues with China to go on for
years
* OPEC+ to cut oil output further from Jan. 1
* Crude stocks surprisingly jump -API

(Adds API data, paragraphs 10-11)
By Stephanie Kelly
NEW YORK, Dec 17 (Reuters) - Oil prices rose more than 1% on
Tuesday, supported by hopes the U.S.-China trade deal will
bolster oil demand in 2020 after a prolonged dispute between the
world's two largest economies dented global market sentiment.
The Phase 1 agreement between the United States and China
has been "absolutely completed," Larry Kudlow, a top White House
adviser, said on Monday, predicting U.S. exports to China will
double under the deal. Brent crude LCOc1 futures gained 76 cents, or 1.2%, to
settle at $66.10 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 futures rose 73 cents, or 1.2%, to settle at $60.94
a barrel.
The Phase 1 agreement does not mean tensions are going to
fully dissipate anytime soon, Dallas Fed President Robert Kaplan
said on Tuesday.
"Phase 1 is better than not having a Phase 1 but it doesn't
mean there won't still be trade uncertainty," Kaplan said in an
interview with Bloomberg TV. "I think the trade issues with
China are going to go on for...years." The prolonged trade dispute has dampened oil demand and
weighed on prices. Banks including JP Morgan and Goldman Sachs
have revised up their 2020 price forecasts in the wake of the
improving trade outlook and a new OPEC-led agreement to curb
output. The Organization of the Petroleum of Exporting Countries and
allies such as Russia - a group known as OPEC+ - will make a
further oil supply cut of 500,000 barrels per day from Jan. 1 to
support the market.
This comes on top of the existing deal to trim supply by 1.2
million bpd that came into effect on Jan. 1 this year.
"The combination of the increased risk appetite and
larger-than-expected OPEC+ production cuts could keep
speculative capital flowing into the long side for a few more
sessions in limiting downside price swings," Jim Ritterbusch,
president of trading advisory firm Ritterbusch and Associates,
said in a note.
U.S. crude inventories rose by 4.7 million barrels in the
week to Dec. 13 to 452 million, data from industry group the
American Petroleum Institute showed late on Tuesday. Analysts
polled by Reuters had expected a draw of 1.3 million barrels.
Prices pared gains slightly in post-settlement
trade after the data was released.
Official government data on stockpiles is due on Wednesday.