Oil dips as demand concerns counter U.S.-China trade hopes

NEW YORK (Reuters) - Oil prices edged lower on Friday and posted weekly losses, as concerns about slower global economic growth outweighed hints of progress in the U.S.-China trade dispute.

FILE PHOTO: Oil pump jacks work at sunset near Midland, Texas, U.S., August 21, 2019. REUTERS/Jessica Lutz/File Photo

Brent crude LCOc1 futures fell 16 cents to settle at $60.22 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures delivery fell 24 cents to end at $54.85 a barrel.

Brent fell 2.1% for the week, its first decrease in five weeks. WTI lost about 3% loss for the week, its first decrease in three weeks.

The world’s two largest economies have been making conciliatory gestures as they prepare for new talks.

China will exempt some U.S. agricultural products from additional tariffs, China’s official Xinhua News Agency said.

Oil prices, however, remained under pressure by concern about a weaker demand outlook.

“Oil appears to be suggesting that global economic growth has already been impacted by the tariffs while other markets such as the equities appear more focused on future progress,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Both the Organization of the Petroleum Exporting Countries and the International Energy Agency (IEA) this week said oil markets could end up in surplus next year, despite a pact by OPEC and its allies to limit supplies that is largely being offset by growing U.S. production.

U.S. energy firms this week reduced the number of oil rigs operating for a fourth week in a row, cutting five rigs this week and bringing the total down to 733, the lowest since November 2017, General Electric Co's GE.N Baker Hughes energy services firm said. RIG-OL-USA-BHI [RIG/U]

Brent prices have risen about 12% so far in 2019, helped by the deal between OPEC and allies, known as OPEC+, to cut output by 1.2 million barrels per day.

An OPEC+ monitoring committee this week secured pledges from OPEC members Nigeria and Iraq to deliver their share of the cut, something they have failed to do so far, but so far the group has not decided to deepen the curbs.

Some OPEC delegates say the idea of a larger cut for next year is gaining support, though Saudi Arabia’s new energy minister said talks on that issue would be left until the next OPEC+ meeting in December.

But “if the U.S.-China trade deal is sealed, they may have to raise production, not cut,” said Phil Flynn, an analyst at Price Futures Group in Chicago, in a note.

Hedge funds and other money managers its combined futures and options position in New York and London by 30,249 contracts to 209,549 in the week to Sept. 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

Additional reporting by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy, Chizu Nomiyama and David Gregorio