Strong China Demand Trumps Concern Of US Production and Boosts Crude Prices

The Grangemouth oil refinery west of Edi

The Forties Pipeline Systems transports oil to the Grangemouth refinery

But U.S. prices fell 1.7 percent on the week and Brent prices fell 0.5 percent amid concerns that rising U.S. production could undermine OPEC-led supply cuts.

Bank of America Merrill Lynch, meanwhile, said healthy global demand and tight supplies should see Brent crude oil rise to $70 per barrel by mid-year.

This morning, Brent futures fell by 0.27% to 63.23 Dollars per barrel, while contracts for the US WTI oil fell 0.3% to 57.20 USD per barrel.

A higher rig count indicates further increase in production.

"It's time for a breather", said Warren Patterson, commodities strategist with ING.

US investment bank Jefferies forecast 2018 global oil demand growth of 1.5 million bpd, driven by nearly 10 percent demand growth in China.

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A year ago, many energy-industry analysts and market gurus expected 2017 to be a year of massive gains for energy stocks amid an oil recovery.

LONDON, Dec 11 (Reuters) - Oil markets edged lower on Monday as ongoing output cuts led by OPEC were countered by rising USA drilling activity that points to a further increase in American production.

Prices, however, fell for a second-straight week on concerns over rising US oil production.

The number of operating drills in the U.S. last week has increased by two, reaching level of 751 - the highest since September, according to Baker Hughes data.

And indeed this seems to be playing out, with data this week showing that USA crude output had risen 25,000 barrels per day (bpd) to 9.7 million bpd in the week to December 1, the highest production since the 1970s and close to the production levels of Russian Federation and Saudi Arabia.

Hedge funds and money managers cut their bullish bets on U.S. crude in the week to December 5, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday on fears of higher U.S. production.

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