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Oil prices rise on strong China demand, signs of U.S. output slowdown

Oil prices rise on strong China demand, signs of U.S. output slowdown
From Reuters - July 16, 2017

SINGAPORE (Reuters) - Oil prices rose on Monday, supported by a slowdown in the growth of rigs looking for crude in the United States and because of strong refinery demand from China.

Brent crude futures were at $49.10 per barrel at 0454 GMT, up 18 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $46.70 per barrel, up 16 cents, or 0.3 percent.

Both benchmarks extended gains from strong performances last week.

Analysts said the rising prices were a result of strong demand as well as signs that a relentless climb in U.S. oil production was slowing.

"The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the U.S. probably explains the positive sentiment in general at the moment," said Jeffrey Halley of futures brokerage OANDA in Singapore.

U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday.

While that is the highest level since April 2015, the rate of additions has slowed. New rigs over the past four weeks averaged five, the lowest since November 2016.

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