UPDATE 8-Oil mixed on forecast of falling U.S. fuel stockpiles

* US-China deal may not be ready for signing in Chile-US
official
* U.S crude stockpiles seen rising, products falling -poll
* Coming Up: API U.S. supply report due at 2030 GMT

(Updates prices to settlement)
By Collin Eaton
HOUSTON, Oct 29 (Reuters) - Oil prices were mixed on
Tuesday, paring earlier steep losses as investors focused on
signs that U.S.-China trade tensions could ease next month and
expectations that U.S. refined product stockpiles declined last
week.
Brent crude LCOc1 settled at $61.59 a barrel, up 2 cents,
after falling as low as $60.66. U.S. West Texas Intermediate
CLc1 crude ended 27 cents lower at $55.54 a barrel, after
earlier hitting a session low of $54.61.
U.S. refined product inventories were seen declining last
week as refinery runs remained relatively low. Gasoline stocks
likely fell 2.2 million barrels, which would their fifth weekly
drawdown, while distillates which include diesel and heating
oil, were seen falling for a sixth week in a row, forecast to
have dropped by 2.4 million barrels, according to a Reuters
poll. "The market is getting increasingly concerned about refined
product inventories, and that's supporting crude oil," said John
Kilduff, a partner at Again Capital LLC in New York. "U.S.
refiners are operating at super-low capacity. They've had a
rough year; there was no real rush to come back into service."
U.S. refinery runs slowed down in September for seasonal
maintenance, and were still low at around 85% of total capacity
in the week ended Oct. 18, according to the U.S. Energy
Information Administration. EIA/S
Strength in refined products prices, with U.S. gasoline
futures RBc1 nearly 1% higher, was pulling crude higher
despite forecasts that U.S. crude stocks rose 500,000 barrels
last week, analysts said.
Low refinery runs "may be slightly bearish for crude in the
short run, but should be wildly bullish for the products. If
they don't get going soon, we'll have a shortage of supply,"
said Phil Flynn, an analyst at Price Futures Group in Chicago.
The first of the weekly supply reports is due at 2030 GMT
from the American Petroleum Institute (API), followed by EIA
data on Wednesday.
Earlier in the sessions, prices fell on the forecast of the
U.S. crude build while Russia's deputy energy minister said it
was too early to talk of deeper output cuts by OPEC and its
allies, adding to the pressure on the market.
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 in Chile next month, a U.S.
administration official said. The clarification of previous White House statements, that
U.S. President Donald Trump and Chinese President Xi Jinping
were expected to sign "phase one" of the trade deal, stymied oil
market optimism that had reversed earlier losses and lifted U.S.
equities. But signs of tension between the United States and China
after a nearly 16-month trade war are still fluid and have had
an outsized impact on crude prices. Market participants believe
the trade war has spooked investors and slowed global economic
growth, crimping oil demand.
"After equities went green, crude oil found a bid and has
rallied from the lows," said Robert Yawger, director of energy
futures at Mizuho.
Oil prices "have been supported by the earnings season on
Wall Street and the expectation that the U.S. and China will
sign a preliminary, phase-one trade deal," said Andy Lipow,
president of Lipow Oil Associates in Houston.

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CHART: Brent oil may drop to $60.83 U.S. crude inventories, weekly changes since 2017 https://tmsnrt.rs/2XlX17b
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