By Koustav Samanta
SINGAPORE, Dec 18 (Reuters) - Oil retreated on Wednesday
after rising more than 1% in the previous session as U.S.
industry data showed a surprise build in crude stocks, but hopes
for firmer demand next year checked a deeper fall in prices.
A "phase one" U.S.-China trade deal announced last week has
helped ward off some pressure from the oil market, dampened by
worries over the economic impact of a prolonged dispute between
the world's two biggest oil consumers.
Brent crude futures LCOc1 dropped 21 cents, or 0.32%, to
$65.89 a barrel by 0110 GMT on Wednesday. The international
benchmark rose 1.2% to $66.10 a barrel on Tuesday.
West Texas Intermediate (WTI) crude futures CLc1 fell 31
cents, or 0.51%, to $60.63 per barrel.
"The sizzling oil market rally came to a grinding halt after
an unexpected climb in the weekly U.S. crude inventory report,"
said Stephen Innes, market strategist at AxiTrader. However, he
added "it's unlikely to be a game-changer."
"Investors have transcended the trade deal inspired relief
rally euphoria and are now banking on a fundamental
demand-driven shift that could quicken the pace of the oil
market rebalancing in the first quarter of 2020."
U.S. crude inventories climbed 4.7 million barrels in the
week to Dec. 13 to 452 million, compared with analysts'
expectations for a draw of 1.3 million barrels, data from
industry group the American Petroleum Institute showed. API/S
Inventory data from the U.S. Energy Information
Administration (EIA) is due later on Wednesday. EIA/S
Meanwhile, deeper production cuts coming from the
Organization of the Petroleum Exporting Countries and allies
such as Russia - a group known as OPEC+ - continued to support
market sentiment and prevented a bigger slide in prices on
Wednesday.
The OPEC+, which has cut production by 1.2 million barrels
per day (bpd) since Jan. 1 this year, will make a further oil
supply cut of 500,000 bpd from Jan. 1, 2020 to support the
market.