* 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)
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 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 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 said in its report on Friday.
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.
(Additional reporting by Bozorgmehr Sharafedin in London and Jane Chung in Seoul; Editing by Susan Fenton, Alexander Smith, Jane Merriman and Will Dunham)