Oil prices improve over signs of fall in US output


Oil prices have improved due to reports of a slowdown in the growth of rigs in the US, along with strong refinery demand from China.  

Brent crude futures were trading at $49.02 per barrel gaining 11 cents, while the US West Texas Intermediate (WTI) crude futures rose by 10 cents to reach $46.64, reported Reuters. 

Both oil benchmarks extended their earlier gains of the previous week.

Industrial service company Baker Hughes reported that US drillers added two rigs in the week ending 14 July that brought the total number to 765. 

"The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the US probably explains the positive sentiment in general at the moment."

The slowdown in the rate of new oil rigs offered support to oil prices, as the addition of new rigs over the previous four weeks averaged five. 

OANDA official Jeffrey Halley was quoted by the news agency as saying: "The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the US probably explains the positive sentiment in general at the moment."

In China, refineries increased crude throughput last month indicating strong demand.

China’s National Bureau of Statistics (NBS) reported that throughput in June stood at 11.21 million barrels per day (bpd), up from May's 10.98 million bpd.