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Oil drops on weak Chinese refining activity

| Updated: October 24, 2017 13:35:29

Oil drops on weak Chinese refining activity

Oil prices dropped on Monday as a slowdown in Chinese refining activity growth cast doubts over its crude demand outlook, while rising US shale output suggested supplies would likely remain high.

Brent crude futures, LCOc1 the international benchmark for oil prices, were at $52.00 per barrel at 0504 GMT, down 10 cents, or 0.2 per cent, from their last close.

US West Texas Intermediate (WTI) crude futures CLc1 were at $48.78 a barrel, down 4 cents, or 0.1 per cent.

Chinese refineries processed 0.4 per cent more crude oil in July than a year earlier at 45.5 million tonnes, or about 10.71 million barrels per day (bpd), data showed on Monday.

This would be the lowest amount on a daily basis since September 2016, according to Reuters calculations based on official data.

Shale production in the largest US oilfield should rise by as much as 300,000 bpd by December, according to industry forecasts.

Oil production from the Permian Basin of West Texas and New Mexico is closely watched because its low costs and rapid growth have pressured efforts by the OPEC to drain a global crude supply glut.

US energy companies added oil rigs for a second time in the last three weeks but the pace of additions has slowed in recent months as firms cut spending plans in reaction to declining crude prices.

Drillers added 3 rigs looking for new oil in the week to Aug. 11 bringing the total count up to 768, the most since April 2015.

General Electric Co's (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday, according to Reuters. 

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