By Enes Tunagur
LONDON (Reuters) -Oil prices fell on Friday and were set for a weekly decline, under pressure from market expectations of oversupply and uncertainty around tariff talks between the United States and China.
Brent crude futures were down 57 cents to $65.98 a barrel at 1314 GMT, taking losses to 2.1% over the week.
U.S. West Texas Intermediate crude was down 55 cents to $62.24 a barrel, a weekly decline of 3.8%.
“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 gains after a spokesperson from China’s foreign ministry said China and the U.S. 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 under way.
“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.
Oil prices fell earlier this month to four-year lows after tariffs sparked investor concern about global demand and a selloff in financial markets.
While the risk is a weaker economy will erode demand, supplies could swell.
Several OPEC+ members have suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.
An end to the war in Ukraine also has the potential to add to supplies if it allows more Russian oil to reach global markets.
The U.S. 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.
(Reporting by Enes Tunagur in London and Siyi Liu in Singapore. Editing by Jacqueline Wong, David Evans, Mark Potter and Barbara Lewis)
