×

UPDATE 6-Oil up as U.S. rigs decline; prices set for first-half drop

* U.S. rig count drops after 23 weekly rises -Baker Hughes

* Libyan oil production exceeds 1 million bpd -source

* Analysts cut 2017 crude oil forecasts again -Reuters poll

* BAML cuts price forecasts on deepening oversupply outlook

* Chinese factory growth quickens - Chinese government data

* Coming up: CFTC Data at 3 p.m. EDT (New throughout, adds Baker Hughes data, updates prices and market activity)

NEW YORK, June 30 (Reuters) - Oil climbed for a seventh straight session on Friday as a decrease in the U.S. rig count and stronger demand data from China lifted depressed prices that remained on track for the biggest first-half decline since 1998.

U.S. drillers decreased their number of rigs for the first time since January, according to energy services company Baker Hughes. The rig count had risen for the previous 23 weeks.

Earlier, Chinese data showed factories grew at the quickest pace in three months. Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, said the strong Chinese data "certainly gives you hope that demand is growing globally."

U.S. crude futures rose 81 cents, or around 1.8 percent, to $45.74 a barrel. at 1:20 p.m. EDT (1720 GMT). Benchmark Brent crude futures were up 52 cents at $47.94 a barrel.

Trading volume was low ahead of the U.S. Independence Day holiday weekend, and both benchmarks were on track for weekly increases of more than 5 percent. Last week, crude hit a 10-month low as rises in output revived concerns about global oversupply.

Brent and U.S. crude fell about 19 percent in the first half of 1998. Oil prices have generally increased in first half of most years.

The U.S. dollar fell to its lowest since October in early trading, making dollar-denominated crude oil less expensive for investors using other currencies.

The persistent global crude glut has knocked 16 percent off Brent crude so far this year, even though the Organization of Petroleum Exporting Countries and other major producers have agreed to cut production about 1.8 million barrels per day (bpd).

Libya, one of two OPEC members exempt from the cuts, has surged past 1 million barrels per day.

Speculators have cut long positions in recent weeks. The market has also seen traders building short positions, said Haworth.

Reuters' monthly oil price poll showed analysts have reduced their price forecasts again, with 2017 average Brent and WTI prices lowered by more than $2 since last month.

Bank of America Merrill Lynch analysts cut their forecast for average 2017 Brent crude prices to $50 a barrel from $54 and WTI to $47 from $52. They cited rising output from Libya, Nigeria and U.S. shale fields, coupled with weaker demand growth.

Drillers cut two oil rigs in the week to June 30, bringing the total rig count down to 756, still more than double the 341 rigs in the same week a year ago, Baker Hughes said on Friday. (Additional reporting by Karolin Schaps in London, Naveen Thukral in Singapore; editing by David Gregorio)