UPDATE 7-Oil slips as trade worries offset Cushing drawdown

© Reuters. UPDATE 7-Oil slips as trade worries offset Cushing drawdown

* Cushing, Oklahoma, crude stocks fell last week -traders
* TC Energy says Keystone oil pipeline returned to service
* Oman says OPEC, allies likely to extend oil supply curbs

(Updates with settlement prices, adds market activity,
commentary)
By Stephanie Kelly
NEW YORK, Nov 11 (Reuters) - Oil prices edged lower on
Monday as little progress on U.S.-China trade negotiations kept
prices pressured, but bullish inventory data in the United
States offered some support.
Brent crude LCOc1 futures lost 33 cents to settle at
$62.18 a barrel, after falling to $61.57 earlier in the session.
U.S. West Texas Intermediate (WTI) crude CLc1 fell 38 cents to
settle at $56.86 a barrel.
Investors are worried about fallout from the 16-month
U.S.-China trade war, which 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.
"We expect the sideward trading to continue for the time
being, with the trade conflict headlines likely to dictate the
direction," Commerzbank said in a note.
U.S. President Donald Trump said on Saturday that trade
talks with China were moving along "very nicely" but the United
States would only make a deal if it was the right one for
America. Trump also said there had been incorrect reporting about
U.S. willingness to lift tariffs as part of a "phase one"
agreement, news of which had boosted markets.
Underlining the impact of the trade war, data over the
weekend showed that China's producer prices fell the most in
more than three years in October. Auto sales in China fell for a 16th consecutive month in
October, data showed on Monday. Prices pared losses on Monday after data showed that crude
inventories at Cushing, the delivery point for WTI, fell about
1.2 million barrels in the week to Nov. 8, traders said, citing
market intelligence firm Genscape.
"There were no real compelling stories to drive us over the
weekend, and all of a sudden we have one piece of hard data that
suggests that maybe oil supplies will fall this week," said Phil
Flynn, an analyst at Price Futures Group in Chicago.
Cushing inventories have grown for five weeks in a row,
according to government data, up till its latest report in the
week ending Nov. 1. But analysts expected that to switch after
the closure on Oct. 30 of the 590,000-bpd Keystone Pipeline, an
important artery for Canadian heavy crude imports to the U.S
Midwest, following an oil spill. However, TC Energy Corp TRP.TO said on Sunday that the
pipeline has returned to service, operating at reduced pressure
with a gradual increase of volumes.
Meanwhile, investors are concerned about excess supplies of
crude, analysts said.
Saudi Arabia raised its oil output in October to 10.3
million barrels per day but kept its supply to the oil markets
below its OPEC output target, a Saudi industry source familiar
with the kingdom's oil operations told Reuters. The Organization of the Petroleum Exporting Countries and
its allies, a group known as OPEC+, will probably extend a deal
to limit crude supply but are unlikely to deepen their cuts,
Oman's energy minister said, as the United Arab Emirates said it
was not worried about long-term growth in oil demand.
OPEC+, which has since January cut output by 1.2 million bpd
under a deal set to last until March 2020, will next meet in
early December.
Lukoil LKOH.MM , Russia's second biggest oil producer,
expects the global oil production cut deal to be extended, its
chief said.

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CHART: U.S. oil may stabilize in $56.33-56.61 Brent oil may find support at $61.77 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>