UPDATE 6-Oil edges higher after Brexit deal, gains capped by pandemic

* U.S. crude, gasoline and distillate stocks fall last
week-EIA
* Investors cheer a Brexit trade deal
* U.S. drillers add oil and gas rigs for fifth week in row

(Updates prices to settlement)
By Nia Williams and Dmitry Zhdannikov
CALGARY, Alberta/LONDON, Dec 24 (Reuters) - Oil prices
inched higher on Thursday, helped by late-day buying in a
low-volume session to close out the week.
The market built gains overnight as Britain and the European
Union reached a post-Brexit trade deal, reversed those gains,
and then rebounded during the U.S. session to end modestly
higher.
U.S West Texas Intermediate (WTI) crude CLc1 settled up 11
cents to $48.23 a barrel, while Brent crude futures LCOc1
settled 9 cents higher at $51.29. Volumes were light on the last
trading day before the Christmas holiday.
For the week, U.S. crude fell 1.6% while Brent lost 2%.
Markets have rallied sharply since late October as vaccines
progressed to approval in numerous countries. Worldwide,
infections are still growing, and investors' outlook will be
clouded by the pandemic for several months.
"While the Brexit deal is supportive, the impact of COVID is
the dominant driver in the oil market," said Andrew Lipow,
president of Lipow Oil Associates, in Houston, Texas. "The oil
market is waiting for the wider distribution of vaccines to get
the public back on the road and in the air."
New strains of the coronavirus, which appear to spread the
disease more quickly, have hit the United Kingdom, Nigeria, and
other countries. At least four drugmakers expect their COVID-19 vaccines will
be effective against the new fast-spreading variant of the virus
that is raging in Britain, and are performing tests that should
provide confirmation in a few weeks. By clinching a Brexit deal, Britain avoids a chaotic
departure from one of the world's biggest trading blocs, a move
many investors warned would have sparked further volatility in
financial markets.