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Oil drops on doubts U.S.-China trade deal will be signed soon, rising U.S. stockpiles

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By Reuters
Oil drops on doubts U.S.-China trade deal will be signed soon, rising U.S. stockpiles
FILE PHOTO: Oil pump jacks at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz   -   Copyright  Jessica Lutz(Reuters)

TOKYO (Reuters) – U.S. crude oil futures fell on Friday amid fading hopes that a deal to end the lingering trade war between Washington and Beijing would be signed any time soon, the gloom compounded by rising crude inventories in the United States.

U.S. West Texas Intermediate (WTI) crude <CLc1> was down 15 cents, or 0.2%, at $57 a barrel by 0032 GMT. The contract rose 1.4% on Thursday.

Brent crude <LCOc1>, the global benchmark, was yet to trade after gaining 0.9% in the previous session.

The trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.

On Thursday, the Chinese commerce ministry said the two countries have agreed in the past two weeks to cancel trade tariffs in different phases, without giving a timeline.

But that comment was shrouded in doubt soon after when Reuters reported that the plan faces stiff internal opposition in the U.S. administration.

Still, Brent is up almost 16% in 2019, supported by a deal between the Organization of the Petroleum Exporting Countries and allies such as Russia to limit supplies until March next year. The producers meet on Dec. 5-6 in Vienna to review the policy.

Meanwhile there is “lingering concern about a rise in inventories in the U.S. last week,” ANZ said in a note.

U.S. crude oil stockpiles rose sharply last week as refineries cut output and exports dropped, while refined products extended a multi-week drawdown, the Energy Information Administration said on Wednesday. [EAI/S]

Stocks at the Cushing, Oklahoma, delivery hub for WTI <USOICC=ECI> rose by 1.7 million barrels, the EIA said.

(Reporting by Aaron Sheldrick; Editing by Kenneth Maxwell)