UPDATE 7-Oil reaches 3-month highs, supported by low U.S. inventories, trade progress

* Trade thin ahead of Christmas holiday
* U.S.-China trade deal expected to boost energy demand
* U.S. crude inventories low, OPEC+ to cut more supply

(Updates with settlement prices)
By Collin Eaton
HOUSTON, Dec 19 (Reuters) - Oil prices reached the highest
level in three months in thin pre-Christmas trading on Thursday,
buoyed by the previous day's news that U.S. crude inventories
declined and as U.S.-China trade tensions continued to ease.
Brent crude futures LCOc1 rose 37 cents to settle at
$66.54 a barrel, gaining for the sixth straight day.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 29
cents to settle at $61.22 a barrel.
Trading volume was thin, with oil headed for a third
consecutive weekly rise. Prices were buoyed by China's Dec. 13
decision to cancel a plan to impose additional tariffs on U.S.
imports on Dec. 15 and the Phase 1 deal between Washington and
China, which has eased trade tensions.
The deal between the world's two largest economies has
improved the global economic outlook, lifting prospects for
higher energy demand next year and underpinning oil prices.
"The market's happy with (Dec. 15) tariffs out of the way
and the trade truce, for now," said Bill Baruch, president at
Blue Line Futures in Chicago.
In a further sign of thawing relations, China's finance
ministry on Thursday published a new list of six U.S. products
that will be exempt from tariffs starting on Dec. 26.
However, if U.S. and Chinese officials fail to provide
concrete details about their efforts to reach a trade agreement,
oil prices could lose their upward momentum, said Gene
McGillian, vice president of market research at Tradition Energy
in Stamford, Connecticut.
"Unless we get real granularity, the uncertainty around
what's happening on the trade front will start to add more
resistance. We need to see signs that a real resolution is at
hand," McGillian said.
Another development lifting prices was the agreement this
month between the Organization of the Petroleum Exporting
Countries and non-OPEC producers such as Russia to deepen
production cuts by a further 500,000 barrels per day (bpd) from
Jan. 1 on top of previous reductions of 1.2 million bpd.
Adding to the positive mood, weekly data from the Energy
Information Administration showed U.S. crude inventories
USOILC=ECI dropped 1.1 million barrels in the week to Dec. 13,
while gasoline and distillates stockpiles rose. of President Donald Trump's impeachment by the U.S.
House of Representatives failed to stir the oil market.