Oil prices firm on rising demand

Signs the recent climb in US oil production is slowing down also adds some support

Oil prices firmed on Monday, supported by a slowdown in new rigs looking for crude and a perception of strong demand.

Brent crude futures, the international benchmark for oil prices, were at $49.08 per barrel early on Monday, up 17 cents, or 0.35%, from their last close.

US West Texas Intermediate crude futures were at $46.70 per barrel, up 16 cents, or 0.34%.

Both crudes extended gains from a strong previous 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.

"Last week's strong draw on US oil inventories was supported by comments from the IEA that demand is growing stronger than they had initially estimated ... The relentless climb in drill rigs operating in the US also subsided," ANZ bank said on Monday.

US drillers added two oil rigs in the week to 14 July, 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.

"Given the usual time lag between price signal and drilling decision, the coming month, which also features the E&P (exploration and production) earning season, will be key," said US bank Goldman Sachs.