UPDATE 7-Oil rises on surprise U.S. crude drawdown, prospect of OPEC action

* U.S. crude stocks fall 1.7 mln bbls -EIA
* OPEC, allies to mull deeper production cuts
* Weak demand growth outlook weighs on sentiment
* Goldman Sachs sees Brent prices around $60/bbl in 2020

(Updates with settlement prices)
By Collin Eaton
HOUSTON, Oct 23 (Reuters) - Oil rose about 2.5% on Wednesday
after government data showed a surprise draw in U.S. crude
stocks and as the prospect of deeper output cuts by OPEC and its
allies offered support.
U.S. crude stocks fell 1.7 million barrels last week as
refineries hiked crude runs by 429,000 barrels per day (bpd) and
oil imports fell, the Energy Information Administration said.
Analysts had expected an increase of 2.2 million barrels.
Brent crude futures LCOc1 settled at $61.17 a barrel, up
$1.47, or 2.5%. West Texas Intermediate (WTI) crude futures
CLc1 rose $1.49, or 2.7%, to end at $55.97 a barrel.
Oil prices had fallen earlier in the session after data on
Tuesday from industry group the American Petroleum Institute
showed U.S. crude stocks rising more than analysts'
expectations, by 4.5 million barrels to 437 million barrels.
API/S
The EIA's report "has put some buyers in the market, but it
will be interesting to see if it lasts. While this will distract
from demand destruction, the market will eventually come back to
it," said Gene McGillian, vice president of market research at
Tradition Energy in Stamford, Connecticut.
The draw in U.S. oil stocks appeared to have been caused by
temporary market factors including higher refinery runs, rather
than a fundamental firming of oil demand, and investors are
still concerned about the global economy following reports of
slowing growth in China and Europe, McGillian added.
A larger-than-expected decline in U.S. gasoline stocks and
lower net oil imports also supported prices, analysts said.
Gasoline stocks fell by 3.1 million barrels, compared with
analysts expectations of a 2.3 million-barrel drop.
"The continued decline in product inventory makes for a
bullish report," said John Kilduff, a partner at Again Capital
LLC in New York. "Gasoline numbers are summer-like; that's
endemic of a good economy (in the U.S.) and people driving to
work."
Net U.S. crude imports fell by 873,000 bpd to the lowest on
record, while exports rose 435,000 bpd to a near record 3.7
million bpd, the data showed.
"No one really saw that coming because it came at a time
when shipping rates were adding a considerable premium to the
barrel," said Robert Yawger, director of energy futures at
Mizuho.
Also helping to underpin prices, the Organization of the
Petroleum Exporting Countries is mulling whether to deepen
production cuts amid concerns of weak demand growth next year.
OPEC and other oil producers including Russia, a group known
as OPEC+, have pledged to cut production by 1.2 million bpd
until March 2020. OPEC and other non-members are scheduled to
meet again Dec. 5-6.
"With the headwinds of strong U.S. producer hedging and high
freight rates fading, we expect stronger Brent timespreads and
higher prices in coming weeks, with upside risk to our year-end
$62 per barrel forecast," Goldman Sachs said in a note.
The investment bank expects Brent prices to continue trading
around $60 a barrel in 2020.