* U.S. crude stocks drop 5.7 mln bbls as imports rise -EIA
* Investors concerned about hitch in trade talks
* TC Energy reports spill in North Dakota, shuts Keystone
pipeline
* U.S. Fed lowers interest rates, signals it is on hold
* Graphic on U.S. inventories: https://tmsnrt.rs/2XkQF8e
(Adds settlement prices)
By Jessica Resnick-Ault
NEW YORK, Oct 30 (Reuters) - Oil prices fell on Wednesday
after a steep U.S. crude inventory build added to worries about
a possible delay in resolving the U.S.-China trade war, which
has hurt global oil demand.
Late in the session, U.S. crude futures found some support
after TC Energy Corp TRP.TO said it was shutting its Keystone
crude pipeline due to a spill in North Dakota. The company did
not say how long the major conduit, which carries 590,000
barrels per day (bpd) of crude from Canada to refineries in the
U.S. Midwest, would be out of service.
U.S. West Texas Intermediate (WTI) crude futures CLc1
settled at $55.06 a barrel, down 48 cents, or 0.9%. Brent crude
futures LCOc1 fell 98 cents, or 1.6% to end at $60.61.
U.S. crude oil stockpiles soared last week amid higher
imports and a release from national reserves, while gasoline and
distillate inventories extended their declines even as refiners
ramped up production, the Energy Information Administration
said. EIA/S
Crude inventories, excluding the Strategic Petroleum Reserve
(SPR), rose 5.7 million barrels, the EIA said, compared with
analysts' expectations for a 494,000-barrel build and a
708,000-barrel decline reported by industry group the American
Petroleum Institute late Tuesday.
"A strong rebound in Canadian imports and another SPR
release has encouraged a build to crude inventories," said
Matt Smith, director of commodity research at Clipper Data.
"Tempering the bearish influence of the solid crude build are
draws to both distillates and gasoline amid a tick higher in
implied demand."
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S.
crude futures rose for a fourth straight week, gaining 1.6
million barrels last week, EIA data showed, dragging on futures
prices for the benchmark.
"Stocks at the WTI delivery hub have been trending higher
since late September, which has put pressure on the prompt WTI
time spreads, with the December/January spread this month having
shifted from backwardation to contango," Dutch bank ING said in
a note.
The United States and China were continuing to work on an
interim trade agreement, but it may not be completed in time for
U.S. and Chinese leaders to sign it next month, a U.S.
administration official said. "Selling came courtesy of the fading optimism over trade and
a Fed rate cut. Risk assets were dealt a blow as market players
worried that the U.S. and China would delay settling their trade
differences," said PVM analyst Stephen Brennock.
The Federal Reserve on Wednesday cut interest rates for the
third time this year to help sustain U.S. growth despite a
slowdown in other parts of the world, but signaled no further
reductions ahead unless the economy takes a turn for the
worse. A rate cut would help to support oil prices because a
stronger economy typically implies higher demand for crude,
while falling inventories suggest the market is coming into
balance.
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CHART: U.S. oil may seek support at $55.05 Brent oil may rise to $62.58 crude inventories, weekly changes since 2017 png https://tmsnrt.rs/2XlX17b
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(Editing by Marguerita Choy and David Goodman)