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* API says U.S. crude inventories rose, EIA report due
* China, U.S. to hold trade talks in October
* OPEC-led supply cuts support, but output rises in August
(Updates prices, adds quote)
By Alex Lawler
LONDON, Sept 5 (Reuters) - Oil edged further above $60 a
barrel on Thursday as hopes of progress in resolving the
U.S.-China trade row boosted investor sentiment, although a
report showing U.S. crude inventories rose unexpectedly weighed
on prices.
Crude had gained more than 4% on Wednesday as positive
Chinese economic data sparked a wider market rally. On Thursday,
China said Beijing and Washington agreed to hold high-level
trade talks in early October.
"The upswing itself is likely to have sparked further
follow-up buying," said Eugen Weinberg of Commerzbank, who added
the planned U.S.-China trade talks were among factors boosting
investor risk appetite.
Benchmark Brent crude was up 17 cents at $60.87 a barrel by
0945 GMT, having earlier fallen to $60.25. U.S. West Texas
Intermediate (WTI) crude rose 1 cent to $56.27.
Still, the American Petroleum Institute (API), an industry
group, on Wednesday said U.S. crude stockpiles rose by 400,000
barrels last week, whereas analysts had expected a fall. The
government's official supply report is due later on Thursday.
"Oil prices remain range-bound despite yesterday's rally,"
said OANDA analyst Craig Erlam. "API reported a modest increase
in inventories on Wednesday, which failed to do much for oil
prices."
The prolonged U.S.-China trade dispute has been a dampener
on oil prices but Brent is still up 12% this year, helped by
production cuts led by the Organization of the Petroleum
Exporting Countries and its allies including Russia.
Nonetheless, both OPEC and Russia boosted production in
August, according to a Reuters survey and Russian energy
ministry figures, weighing on prices.
Also putting downward pressure on prices has been mounting
evidence of slowing economic growth worldwide, which has
prompted analysts to lower forecasts for oil demand growth.
BP Chief Financial Officer Brian Gilvary told Reuters
on Wednesday that global oil demand was expected to grow by less
than 1 million barrels per day in 2019, a slowdown from previous
years.
Later on Thursday, attention will focus on U.S. government
weekly inventory figures from the Energy Information
Administration to see if they confirm API's view on inventory
changes. The EIA report is due out at 1500 GMT.
Analysts expect crude stocks fell by 2.5 million barrels in
the week to Aug. 30.
(Additional reporting by Aaron Sheldrick;
Editing by Edmund Blair and David Evans)
