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Oil prices post weekly loss as supply fears wane
OIL prices fell on Friday and posted a weekly loss on a faster-than-expected recovery in Saudi output, while investors also worried about global crude demand amid slowing Chinese economic growth.
During a volatile session, Brent crude futures fell 83 US cents, or 1.3 per cent, to settle at US$61.91 a barrel, after dropping to a session low of US$60.76 a barrel.
US West Texas Intermediate (WTI) crude futures fell 50 cents, or 0.9 per cent, to settle at US$55.91 a barrel. It hit a session low of US$54.75 a barrel.
Brent fell 3.7 per cent for the week, its biggest weekly loss since early August. WTI lost 3.6 per cent, its steepest loss since mid-July.
Crude futures fell along with other higher-risk assets after news that the United States government is considering the possibility of delisting Chinese companies from US exchanges, a source briefed on the matter said on Friday. The move would be a radical escalation of trade tensions between the US and China.
Earlier in the session, futures fell after Iranian President Hassan Rou-hani said the US offered to remove all sanctions on Iran in exchange for talks. However, US President Donald Trump then said he had refused the request by Teheran.
"We've really been following headline to headline," said Phil Flynn, an analyst with Price Futures Group in Chicago.
Also weighing on prices, a Wall Street Journal report citing unnamed sources said Saudi Arabia had agreed to a partial ceasefire in Yemen, said analysts in the Reuters Global Oil Forum.
"Saudi Arabia has occupied centre stage in prompting a major upswing in oil price volatility through most of this month both on a daily and weekly basis," Jim Ritterbusch, of Ritterbusch and Associates, said in a note.
Brent is just above its level before attacks on Saudi facilities on Sept 14, which initially halved the kingdom's production.
Sources said Saudi Arabia had restored capacity to 11.3 million barrels per day. Saudi Aramco has yet to confirm it is fully back online.
The International Energy Agency said it might cut its estimates for global oil demand for 2019 and 2020 should the global economy weaken further.
In China, the biggest importer of crude oil, industrial companies reported a contraction in profits in August.
Key oil freight rates from the Middle East to Asia rocketed as much as 28 per cent on Friday in the global oil shipping market, spooked by US sanctions on units of China's Cosco for alleged involvement in ferrying crude out of Iran. The Cosco vessels account for about 7.5 per cent of the world's fleet of supertankers, Refinitiv data showed. REUTERS