Oil prices firm on strong China demand

Reuters | Published: July 17, 2017 08:58:59 | Updated: October 24, 2017 05:01:14


Oil prices strengthened 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, the international benchmark for oil prices, were at $49.04 per barrel at 0353 GMT, up 13 cents, or 0.3 per cent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $46.64 per barrel, up 10 cents, or 0.2 per cent.

Both crudes extended gains from strong performances last week.

Traders and analysts said the rising prices were a result of strong demand as well as signs that a relentless climb in US oil production was slowing down.

US drillers added two oil rigs in the week to July 14, bringing the total count up to 765, energy services firm Baker Hughes said on Friday.

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

In Asia, China's refinery activity continues to indicate strong fuel demand.

Chinese oil refineries increased throughput in June to the second highest on record, with some independent plants raising output even as state oil majors prepare to take drastic steps to cut production during the peak summer season.

Throughput last month hit 46.08 million tonnes, or 11.21 million barrels per day (bpd), a 2.3-percent rise from a year ago and up from May's 10.98 million bpd, data from the National Bureau of Statistics (NBS) showed on Monday.

The number was just short of December's record high of 11.26 million bpd.

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