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Oil prices tumbled about 2 per cent on Friday on rising U.S.-China tensions and doubts about how quickly fuel demand would recover from the coronavirus crisis.

Fuel demand plummeted as the coronavirus pandemic caused governments to impose restrictions on movement and businesses closed their doors.

Oil has rallied in recent days as activity starts to resume, but prices dropped after China said on Friday it would not publish an annual growth target for the first time. Beijing also pledged more government spending as the pandemic kept hammering the economy.

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“The coronavirus has nullified a decade of global oil demand growth and the recovery will be slow,” said Stephen Brennock of broker PVM.

Brent crude futures fell 93 cents, or 2.6 per cent, to settle at $35.13 a barrel. U.S. West Texas Intermediate (WTI) crude ended 67 cents, or 2 per cent, lower at $33.25 a barrel.

China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, a Chinese official said on Thursday, drawing a warning from President Donald Trump that Washington would react “very strongly.”

For the week, Brent and WTI gained 8 per cent and 13 per cent, respectively, but some said they may have come too far, too fast.

“A second wave (of the coronavirus) is not such a remote possibility and a new round of lockdowns could send prices back to much lower levels very quickly, and the market knows it,” said Rystad Energy senior oil markets analyst Paola Rodriguez Masiu.

Oil prices have plummeted more than 40 per cent so far in 2020, rebounding in part due to efforts by the Organization of the Petroleum Exporting Countries and allies to reduce supply. The group known as OPEC+ is reducing supply by a record 9.7 million barrels per day from May 1 to support the market.

The U.S. rig count, an early indicator of future output, fell by 21 to a record low 318 this week, according to energy services firm Baker Hughes Co’s data going back to 1940.

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In a sign of the glut easing, U.S. crude inventories fell last week.

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