UPDATE 9-Oil slips on trade fears but soars in week after Saudi production attacked

Reuters

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    * Brent rises 6.7% in biggest weekly advance since January
    * U.S. crude up 5.9% in biggest weekly gain since June
    * Geopolitical tensions rise as Saudi coalition attacks
Yemen
    * Tropical storm Imelda hits U.S. energy infrastructure
    * U.S. oil drillers cut rigs to least since May 2017 -Baker
Hughes

 (Adds hedging activity, CFTC data)
    By Stephanie Kelly
    NEW YORK, Sept 20 (Reuters) - Oil prices eased on Friday on
renewed concern over the U.S.-China trade war, but futures still
posted weekly gains, with Brent marking its biggest weekly
increase since January, after an attack on Saudi Arabia's energy
industry last weekend.
    Brent crude  LCOc1  futures fell 12 cents to settle at
$64.28 a barrel, while U.S. West Texas Intermediate (WTI) crude
 CLc1  futures ended 4 cents lower at $58.09 a barrel.
    Prices pared gains along with the stock and grains markets 
after Chinese agriculture officials that were due to visit U.S.
farm states next week canceled their trip to Montana and
Nebraska to return to China sooner than originally scheduled.
 urn:newsml:reuters.com:*:nL2N26B0ZA urn:newsml:reuters.com:*:nL2N26B12B
    The cancellation came as trade talks were held in Washington
and U.S. President Donald Trump said he wanted a complete trade
deal with the Asian nation, not just an agreement for China to
buy more U.S. agricultural goods.
    For the week, however, Brent rose 6.7%, its biggest gain
since January, while WTI gained 5.9%, the most since June.
    U.S. shale producers pounced on the chance to lock in future
revenue for this year and next after oil prices surged by the
most in 30 years early this week following the attack, sources
familiar with the money flows said.  urn:newsml:reuters.com:*:nL3N26A4FY
    Money managers raised their net long U.S. crude futures and
options positions by 11,209 contracts to 220,758 in the week to
Sept. 17, the U.S. Commodity Futures Trading Commission (CFTC)
said.  urn:newsml:reuters.com:*:nL5N26B588
    The oil market jumped nearly 20% on Monday in reaction to
the Sept. 14 attack, which halved Saudi production and cut
global supplies by about 5%. But prices have since pared most of
those gains on assurances from the kingdom that it would restore
lost production by the end of this month. urn:newsml:reuters.com:*:nL5N2685W2
    Prices, however, have kept a risk premium as geopolitical
tensions in the region have escalated with the United States and
Saudi Arabia blaming the attack on Iran. Tehran denies any
involvement.     
    The attack has intensified a years-long struggle between
Saudi Arabia and Iran, who are locked in a sometimes violent
contest for influence in several flashpoints around the Middle
East.
    A Saudi-led coalition on Friday launched a military
operation north of Yemen's port city of Hodeidah while the
United States worked with Middle East and European nations to
build a coalition to deter Iranian threats.  urn:newsml:reuters.com:*:nL5N26A70O
 urn:newsml:reuters.com:*:nL5N26A2MM
    State-owned Saudi Aramco has switched crude grades and
delayed crude and oil product deliveries to customers by days
after the attack severely reduced its light oil production and
led to output cuts at its refineries, market sources said.
 urn:newsml:reuters.com:*:nL3N26B2J6
    Whilst showing reporters the damaged the Khurais field and
the Abqaiq oil processing facility, Aramco said it was shipping
equipment from the United States and Europe to rebuild the
damaged facilities. It also said that Abqaiq is expected to have
full capacity restored by the end of the month. urn:newsml:reuters.com:*:nB2N249012
    "The question is can they convince the market that they can
keep their oil fields safe," said Phil Flynn, an analyst at
Price Futures Group in Chicago, in a note.
    In the United States, meanwhile, flooding from Tropical
Storm Imelda forced a major refinery to cut production, while a
key oil pipeline, terminals and a ship channel in Texas were
shut, according to sources familiar with operations.
 urn:newsml:reuters.com:*:nL2N26B0IN  urn:newsml:reuters.com:*:nL2N26A0H0
    Exxon Mobil Corp  XOM.N  shut some units at its 369,024
barrel per day (bpd) Beaumont refinery while Valero Energy Corp
 VLO.N  reduced production at its 335,000 bpd Port Arthur
refinery. 
    U.S. energy firms this week reduced the number of oil rigs
operating for a fifth week in a row to the lowest since May
2017. Drillers cut 14 oil rigs in the week to Sept. 20, bringing
the total count down to 719, General Electric Co's  GE.N  Baker
Hughes energy services firm said.  RIG-OL-USA-BHI   urn:newsml:reuters.com:*:nL2N26B0NO

 (Additonal reporting by Julia Payne in London and Florence Tan
in Singapore
Editing by Marguerita Choy and David Goodman)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))

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