Oil Edges Up on Chinese Demand
Strong Chinese imports support crude; U.S. crude output hits highest levels since 1970s.
Oil prices edged up on Friday, helped by rising Chinese crude demand and threats of a strike in Africa's largest oil exporter.
But prices were still on track for their largest weekly loss since early October amid concerns that rising U.S. production would undermine OPEC-led supply cuts aimed at curbing a glut.
By 1039 GMT, Brent crude was up 39 cents at $62.59 a barrel, but still heading for a weekly slide of 1.8 percent.
U.S. West Texas Intermediate (WTI) crude was at $56.07 a barrel, up 38 cents from their last settlement. The contract was on track for a 2.2 percent loss on the week.
China's crude oil imports rose to 9.01 million barrels per day (bpd), the second highest on record, data from the General Administration of Customs showed on Friday.
Booming demand will push China ahead of the United States as the world's biggest crude importer this year.
U.S. investment bank Jefferies forecast 2018 global oil demand growth of 1.5 million bpd, driven by almost 10 percent demand growth in China.
"Generally speaking, the market is looking more healthy than sick," said Tamas Varga, analyst with PVM Oil Associates.
Varga said threats of a strike later this month from a union in Nigeria, Africa's largest oil exporter, was supportive, as was reduced flow along the Britain's Forties oil pipeline, one of the grades that sets Brent prices.
But U.S. oil production growth has threatened to undermine production cuts by the Organization of the Petroleum Exporting Countries, Russia and other producers. The group has agreed to extend the pact to the end of 2018.
The voluntary output cuts pushed oil prices higher between June and October, with Brent gaining around 40 percent.
But the U.S. Energy Information Administration said that U.S. crude output had risen 25,000 bpd to 9.71 million bpd in the week to Dec. 1, the highest production since the 1970s and close to the production levels of Russia and Saudi Arabia.
U.S. oil exports also climbed to 1.73 million bpd in October, from 1.47 million bpd in September.
Some analysts said this was cutting into the market share of other oil exporters.
"The sharp reduction in Saudi Arabian crude oil shipments is not reflected in the Chinese import statistics, meaning that other suppliers such as Russia, Iraq or the U.S. are likely to have stepped into the breach," Commerzbank said in a note.
By Libby George
