U.S. crude pares gains after stockpile data

* EIA reports 1.9 million bpd drop in U.S. crude stockpiles

* Keystone crude deliveries to U.S. cut by 85 pct through Nov

* OPEC meets on Nov. 30 to discuss production targets (Updates prices, adds EIA data, changes dateline to BOSTON, previously LONDON)

By Jessica Resnick-Ault

BOSTON, Nov 22 (Reuters) - Oil pared gains on Wednesday, retreating slightly from a more than two-year high after U.S. crude stockpiles fell less than an industry group suggested on Tuesday.

Still, U.S. crude prices remained elevated near a $58 two-year high after sources said the Keystone pipeline will cut deliveries by 85 percent or more through the end of November. .

Crude inventories fell by 1.9 million barrels in the week to Nov. 17, according to weekly data from the U.S. Energy Information Administration. The official data was less bullish than Tuesday's report from the American Petroleum Institute (API (Stuttgart: 565969.SG - news) ), which showed a 6.4 million barrel crude stockpile decline.

"Current price levels are still inciting U.S. companies to produce more, which will remain a concern for the OPEC ahead of the cartel’s November meeting," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

U.S. crude rose 58 cents to $57.41 a barrel by 10:44 ET/1544 GMT after release of the data after earlier hitting a session high of $58.05, the highest since July 2015. Brent crude , the global benchmark, was up 14 cents at $62.70 after earlier trading as high as $63.39.

The front-month U.S. crude moved to a premium to the second-month for the first time in almost 3 years after reports of the Keystone delivery cuts. The bullish structure, known as backwardation, has not been seen since Dec (Shanghai: 600875.SS - news) . 19, 2014.

Brent's premium to U.S. crude also narrowed, falling by 49 cents or 8.5 percent to $5.25 a barrel in the session.

"A wide price premium of Brent over WTI crude will encourage more exports of U.S. oil over the coming weeks,” Interfax's Kumar said.

U.S. supplies have been a key factor in determining how quickly a global supply overhang can be reduced. The tug-of-war between concerns over supply cuts due to the Keystone delivery cuts and more robust overall inventories shows how the oil market is grappling to untangle the U.S. supply picture.

Keystone, which carries 590,000 barrels per day of crude from Alberta's oil sands to markets in the United States, was shut last week after a 5,000-barrel spill in South Dakota.

Crude inventories fell by 1.9 million barrels in the week to Nov. 17. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.8 million barrels, EIA said.

Oil has also been supported by an effort led by the Organization of the Petroleum Exporting Countries to end a global supply overhang by restraining output.

The deal to curb production expires in March but is widely expected to be extended at a Nov. 30 meeting.

"There is growing consensus that OPEC will extend their production cut deal at the end of the month. This confidence along with the current geopolitical environment has kept ICE Brent trading firmly above $60 per barrel," Dutch bank ING said.

"However, an outcome at the OPEC meeting which falls short of market expectations will likely lead to a selloff, and given the large speculative long in Brent, this could be fairly severe," it added. (Additional reporting by Henning Gloystein in Singapore and Alex Lawler in London, Editing by Louise Heavens and Phil Berlowitz)