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Brent rises, U.S. oil recoups losses after pipeline resumes

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* Gulf of Mexico output returning to normal after storm

* Concerns over U.S. debt default cloud demand outlook (Updates prices to settlement)

NEW YORK - Crude oil futures on both sides of the Atlantic pared losses on Monday after a sharp drop in earlier trade, following a report that a key pipeline delivering crude oil from Cushing, Oklahoma, had resumed shipping after an earlier outage.

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