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Oil prices rise ahead of trade deal likely stock draw

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Despite the trade dispute, China's crude oil imports in 2019 surged 9.5% from the previous year, setting a record for a 17th straight year as demand growth from new refineries propelled purchases by the world's top importer, data showed.

The breather comes after an 18-month long trade war between the world two largest economies.

U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that the tariffs would remain even as a trade deal is set to be signed on Wednesday. Chinese demand has been the main driver of global fuel consumption growth.

Official U.S. data showing a much bigger than expected drop in crude oil inventories, which also helped to underpin prices, Chauhan said.

Brent crude LCOc1 was down 21 cents, or 0.3%, at $64.28 per barrel.

Brent LCOc1 was 30 cents, or 0.5%, higher at $64.30 a barrel by 0754 GMT, while US crude was up by 30 cents, or 0.5%, at $58.11 a barrel.

"Oil prices are tentatively rebounding after seller exhaustion kicked (in) as investors await the next developments on the trade front and whether we see a strong pickup with global demand following the phase-one trade deal", Edward Moya, senior market analyst at OANDA in NY, said in a report.

US crude production also rose to a record 13 million barrels per day, the agency said.

Crude oil futures gained 0.78 percent to Rs 4,132 per barrel on January 16 as participants increased their long position after US President Donald Trump and Chinese Vice Premier Liu He signed "Phase One" of the trade deal.

Under the terms of the agreement, USA energy exports to China will jump over the next two years, with the promise of an additional $18.5 billion worth of additional purchases in 2020 and $33.9 billion in 2021. Gasoline and distillate inventories also climbed.

The weekly report published by the US Energy Information Administration (EIA) on Wednesday showed that commercial crude oil inventories in the US fell by 2.5 million barrels in the week ending January 10th, compared with analysts' expectation for a drop of 474K barrels.

The purchases over two years will include liquefied natural gas, crude oil, refined products and coal, the USA government said Wednesday in Washington.

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