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Oil edges up towards $49, U.S. drilling slowdown supports


Reuters

UPDATE 7-Oil edges up towards $49, U.S. drilling slowdown supports


* U.S. drilling growth slows but rig count still high
    * China's refiners process near record amounts of crude
    * Kuwait says market on path to rebalancing

 (Updates prices, adds quote in paragraph 4)
    By Alex LawlerLONDON, July 17 (Reuters) - Oil edged up to about $49 a
barrel on Monday after fewer drilling rigs were added in the
United States last week, helping ease concerns that surging
shale supplies will undermine OPEC-led production cuts.
    U.S. drillers added two oil rigs in the week to July 14,
bringing the total to 765, Baker Hughes <BHGE.N> said on Friday.
<RIG-OL-USA-BHI> Rig additions over the past four weeks averaged
five, the slowest pace of growth since November.
    A sharp drop in U.S. crude inventories in the week to July 7
supported prices last week. [EIA/S] But crude stocks in
industrialised nations remained high, putting a brake on the oil
price rally. [IEA/M]
    "The market is not doing too much today - it feels like wait
and see," said Olivier Jakob of oil analyst Petromatrix. "There
is some rebalancing in products, but overall the layers of
stocks are still very large."
    Brent crude <LCOc1>, the global benchmark, was up 8 cents at
$48.99 a barrel by 1341 GMT. U.S. crude <CLc1> traded at $46.57,
up 3 cents.
    Oil prices are less than half their mid-2014 level because
of a persistent glut, even after the Organization of the
Petroleum Exporting Countries with Russia and other non-OPEC
producers cut supplies since January.
    While OPEC-led cuts have offered prices some support, rising
supplies from Nigeria and Libya, two OPEC states exempt from the
pact, and increasing U.S. production have weighed on the market.
    Kuwait said on Friday the market was on a recovery track due
to rising demand and said it was premature to cap Nigerian and
Libyan output. An OPEC and non-OPEC committee meets in Russia on
July 24 to discuss the impact of the deal. [nL8N1K51RN]
    In a sign of strong demand, data on Monday showed refineries
in China increased crude throughput in June to the second
highest on record. [nL3N1K81F8] OPEC is hoping higher demand in
the second half will get rid of excess inventories.
    "There is almost an agreement that the second half of the
year should be tighter than the first half due to significant
jumps in demand forecasts," oil broker PVM said. "The net result
is a rise in the demand for OPEC oil."

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Brent crude oil futures    http://reut.rs/2uzdLNW
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 (Additional reporting by Henning Gloystein; editing by Edmund
Blair and David Clarke)
 ((alex.lawler@thomsonreuters.com; +44 207 542 4087; Reuters
Messaging: alex.lawler.reuters.com@reuters.net))

Keywords: GLOBAL OIL/ (UPDATE 7)



This article appears in: Stocks , World Markets , Oil , Commodities
Referenced Symbols: BHGE


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