By Enes Tunagur
LONDON (Reuters) -Oil prices fell on Friday and were set for a weekly decline of over 2% on the back of oversupply concerns and uncertainty around tariff talks between the U.S. and China.
Brent crude futures fell 41 cents to $66.14 a barrel by 0953 GMT, falling 2.6% on the week.
U.S. West Texas Intermediate (WTI) crude fell 36 cents to $62.43 a barrel, having declined 3.5% for the week.
“On a weekly basis … prices are down as concerns over oversupply from OPEC+ persist, while the demand outlook remains uncertain amid ongoing trade tensions. A stronger U.S. dollar has also added pressure to crude prices,” LSEG senior analyst Anh Pham said.
Oil erased earlier gains after a spokesperson from China’s foreign ministry said China and the United States were not having any consultations or negotiations on tariffs. That contradicted earlier comments by U.S. President Donald Trump, who said on Thursday trade talks between the U.S. and China were underway.
“Traders now view further (crude price) gains as unlikely in the short term due to the continued trade war among top global consumers and speculation that OPEC+ may accelerate production hikes from June,” Saxo Bank analyst Ole Hansen said.
China has exempted some U.S. imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing’s concerns about the trade war’s economic fallout.
China hiked its tariffs after Trump announced higher levies on Chinese goods.
Oil prices tumbled earlier this month after the tariffs sparked concern about global demand and a sell-off in financial markets.
Worries are growing about excess supply. Several OPEC+ members had suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.
The United States and Russia are moving in the right direction to end the war in Ukraine, but some specific elements of a deal remain to be agreed, Russian Foreign Minister Sergey Lavrov said in an interview with CBS News.
A halt to Russia’s war in Ukraine and the easing of sanctions could allow more Russian oil to flow to global markets. Russia, a member of the OPEC+ group that includes the Organization of the Petroleum Exporting Countries, is one of the world’s biggest oil producers along with the U.S. and Saudi Arabia.
(Reporting by Enes Tunagur in London and Siyi Liu in Singapore; Editing by Kate Mayberry, Jacqueline Wong and David Evans)
