UPDATE 10-Oil falls ahead of hurricane but posts weekly gain as U.S.-China trade war eases

* Brent posts weekly rise of 1.8%, WTI up 1.7%
* For the month, Brent drops 7.3%, WTI down 6%
* Hurricane headed for Florida may hit oil demand
* OPEC posts first 2019 oil-output rise despite Saudi cuts
* U.S. oil drillers cut rigs for 9th month to least since
Jan 2018

(Updates with CFTC data)
By Stephanie Kelly
NEW YORK, Aug 30 (Reuters) - Oil futures fell on Friday,
with U.S. crude down nearly 3% ahead of a hurricane near the
Florida coast that could dampen demand, but prices were still
headed for the biggest weekly increase since early July, boosted
by an easing of U.S.-China trade rhetoric.
Brent crude LCOc1 futures fell 65 cents, or 1.1%, to
settle at $60.43 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 futures settled down $1.61, or 2.8%, at $55.10 a
barrel.
Hurricane Dorian gained strength as it crept closer to
Florida's coast on Friday, raising the risk that parts of the
U.S. state will be hit by strong winds, a storm surge and heavy
rain for a prolonged period after it makes landfall early next
week. "The latest modeling has Hurricane Dorian avoiding the Gulf
of Mexico, while raking the entire state of Florida, turning it
into a demand destruction event for the energy market rather
than a supply disruption event," said John Kilduff, a partner at
Again Capital in New York.
U.S. crude oil output fell for a second straight month in
June, dropping by 33,000 barrels per day (bpd) to 12.08 million
bpd, the U.S. Energy Information Administration said in a
monthly report released on Friday. In an indication of future production, U.S. energy firms cut
12 oil rigs in the week to Aug. 30, bringing the total count
down to 742, General Electric Co's GE.N Baker Hughes energy
services firm said on Friday. The rig count declined for the
ninth straight month to its lowest level since January last
year. RIG-OL-USA-BHI Meanwhile, the Organization of the Petroleum Exporting
Countries' oil output rose 80,000 barrels per day in August, the
first monthly increase this year, a Reuters survey found.
OPEC, Russia and other nonmembers, an alliance known as
OPEC+, agreed in December to reduce supply by 1.2 million bpd in
2019. Russia's oil output in August was slightly higher than
levels agreed under its output deal with OPEC+, but Moscow is
still aiming to comply fully with the deal, RIA and Interfax
news agencies cited Energy Minister Alexander Novak as saying.
Oil prices have fallen around 20% since they hit a 2019 peak
in April, in part because of concerns that the U.S.-China trade
war could hurt the global economy and soften demand for oil.
In August alone, Brent posted a monthly drop of 7.3%, and
WTI fell by 6%.
This week, however, WTI gained by 1.7% and Brent by 1.8%, in
part due to hopes that trade tensions between the world's two
biggest oil consumers are easing.
Chinese and U.S. trade negotiating teams are maintaining
effective communication, China's Foreign Ministry said on Friday
at a daily news briefing in Beijing. Analysts polled by Reuters slashed price forecasts for Brent
to an average of $65.02 in 2019 - the lowest in more than 16
months - citing softening global demand brought on by an
economic slowdown and the trade war. Hedge funds and other money managers cut their net long U.S.
crude futures and options positions in the week to Aug. 27 by
20,049 contracts to 197,055, the U.S. Commodity Futures Trading
Commission (CFTC) said on Friday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART: Brent oil may edge up to $61.63 L3N25Q0F9
CHART: U.S. oil may test resistance range of $56.96-$57.30
L3N25Q0YM
U.S., Russian, Saudi crude oil production png https://tmsnrt.rs/2QYNGAd
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(
Reporting by Stephanie Kelly in New York
Additional reporting by Noah Browning in London and Aaron
Sheldrick in Tokyo
Editing by Richard Chang and Matthew Lewis)