UPDATE 8-Oil prices down but log third weekly rise on trade hopes

* Both benchmarks heading for 3rd straight weekly rise
* U.S.-China trade tension easing lifts oil demand prospects
* U.S. drillers add most oil rigs in week since Feb 2018
* Third-quarter GDP growth unrevised at 2.1%

(Updates prices, market activity and comments to settlement)
By Laila Kearney
NEW YORK, Dec 20 (Reuters) - Oil prices fell on Friday, but
both benchmarks logged a third straight weekly gain amid the
easing of U.S.-Chinese trade tensions, which has boosted
business confidence and the outlook for global economic growth.
Brent LCOc1 crude futures settled at $66.14 a barrel, down
40 cents, or 0.6%, but marked a weekly rise of around 1.4%. U.S.
West Texas Intermediate crude CLc1 futures settled at $60.44 a
barrel, falling 40 cents, or 1.21%, while gaining about 0.6% on
the week.
Progress in the trade dispute between the world's two
biggest oil consumers has raised expectations of higher energy
demand next year.
"(The focus) continues to be the developments around the
U.S.-China trade situation, with a sufficient amount of positive
spin all week," said John Kilduff, a partner at Again Capital in
New York.
China on Thursday announced a list of import tariff
exemptions for six oil and chemical products from the United
States, days after Washington and Beijing said an interim trade
deal is set to be signed in January. Advancement of the U.S.-Mexico-Canada Agreement (USMCA),
which is set to replace the North American Free Trade Agreement
(NAFTA), has also boosted oil this week. The agreement was
passed by the U.S. House of Representatives on Thursday.
Some selling ahead of the Christmas and New Year's Day
holidays was pushing prices lower, said Phil Flynn, an analyst
at Price Futures Group in Chicago.
"We've had a pretty good run the last couple of days, and I
think the bulls are nervous about carrying positions into the
holiday," Flynn said.
A rise in the U.S. oil rig count, an indicator of future
supply from the world's largest producer, also put pressure on
prices.
U.S. energy firms added the most oil rigs this week since
February 2018, even though producers have been reducing spending
on new drilling, energy services firm Baker Hughes Co BRK.N
said in its report on Friday. RIG/U
Companies added 18 oil rigs in the week to Dec. 20, bringing
the total count to 685, the most since early November, Baker
Hughes said.
U.S. economic growth nudged up in the third quarter, the
government confirmed on Friday, and there are signs the U.S.
economy more or less maintained the moderate pace of expansion
as the year ended, supported by a strong labor market.
The end of 2019 offered much noise but little direction, and
prices were treading water on average, Julius Baer analyst
Carsten Menke said. "Looking forward into 2020, commodities as
an asset class should continue to trade range-bound for most of
the year," Menke said.

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China announces new tariff exemptions for U.S. chemical, oil
products to sign 'Phase one' trade pact in early January
-Mnuchin Morgan raises 2020 oil price view on OPEC+ cuts, improved
economic outlook Sachs raises 12-month commodity returns forecast
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