* U.S. crude stockpiles down 7.5 million barrels last week
* Cushing stocks dropped by 650,000 barrels last week -EIA
* Brent to climb to $108 a barrel by end of week -analyst
By Keith Wallis
SINGAPORE July 17 Brent futures held above $107
a barrel on Thursday as a sharp drop in U.S. crude stockpiles
and promising economic growth data from China indicated an
improving outlook for demand in the world's top two oil
Continued worries about the geopolitical situation in North
Africa, the Middle East and Ukraine also underpinned oil prices.
The Brent contract for September, which became the
front-month contract on Thursday, rose 3 cents to $107.20 by
0356 GMT. The August contract, which expired on Wednesday,
dropped 17 cents to settle at $105.85 a barrel.
U.S. crude for August delivery climbed 24 cents to
$101.44, after closing up $1.24 in the previous session.
Oil prices rose in Asia following overnight gains after a
larger-than-expected drawdown in overall U.S. stockpiles and at
the Cushing, Oklahoma delivery hub, said Avtar Sandu, senior
commodities manager at Singapore's Phillip Futures.
A rise in U.S. refining activity caused crude stocks to fall
by 7.5 million barrels last week, the biggest draw since January
and larger than the 2.1 million drawdown forecast by analysts,
the U.S. Energy Information Administration (EIA) said in its
"The economy in the U.S. is on track to grow. The Chinese
economy increased a bit - the growth figures were slightly
higher so some support for oil is coming in from the demand
side," Sandu said.
China saw slightly better-than-expected economic growth of
7.5 percent in the second quarter this year, according to
government data on Wednesday.
The country's implied oil demand rose to 10.2 million
barrels per day in June, its highest level since January 2013,
according to Reuters calculations based on preliminary
"I don't expect oil to drop after this bounce," said Sandu,
who forecast Brent would end the week around $108 and West Texas
Intermediate would close the week around $102.
Investors are keeping an eye on geopolitical tensions for
further trading cues.
In Libya, oil exports through its two largest eastern ports,
capable of exporting 500,000 barrels per day, will not start
before August, an official said Wednesday.
Exports through Brega have stopped due to a protest by oil
guards, while 20 aircraft were damaged by shelling at Libya's
main airport in the worst fighting in the capital Tripoli in
months as rival militia battled for control.
Russia is facing tougher sanctions from the U.S. and Europe
over the situation in Ukraine where 11 soldiers were killed on
Wednesday as government forces battled pro-Russian separatists
in the east of the country.
Rosneft, Russia's largest oil producer, was among
the firms targeted by further U.S. sanctions announced Wednesday
at the same time as Europe agreed to impose its own package.
(Editing by Himani Sarkar)