Oil prices fell on Friday but posted their second straight week of gains ahead of trade talks between the U.S. and Chinese presidents this weekend, and on widely expected production cuts from OPEC on Monday.
The most active September Brent crude futures fell 93 cents to settle at $64.74 a barrel. Brent August crude futures settled unchanged at $66.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures lost 96 cents to settle at $58.47 a barrel.
Brent posted a gain of more than 20 per cent in the first half of 2019, while WTI marked a gain of more than 25 per cent. Both contracts also notched their second straight weekly gain.
Oil futures fell just ahead of settlement as investors sized up positions before meetings this weekend and next week that could lend direction for the market.
The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between U.S. President Donald Trump and Chinese President Xi Jinping on Saturday.
A trade war between the world’s two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil.
Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs.
The Organization of the Petroleum Exporting Countries and some non-members including Russia, known as OPEC+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts.
“You had a wave of selling come in advance of the OPEC and non-OPEC meeting on Monday, where it’s fully expected that they’re going to rollover production cuts,” said Andrew Lipow of Lipow Oil Associates in Houston.
“But ironically they’re doing that because they’re seeing the oil demand growth forecast get revised downward and that’s contributing to a sense that we remain oversupplied.”
Russia is cutting its oil output in June by slightly more than envisaged in the OPEC+ deal, RIA news agency cited Russian Energy Minister Alexander Novak as saying.
OPEC+ members agreed to curb oil output by 1.2 million barrels per day from Jan. 1.
Oil prices could stall as a slowing global economy squeezes demand and U.S. crude floods the market, a Reuters poll of analysts found, despite an expected extension by OPEC and its allies of their output-cutting pact.
The survey of 42 economists and analysts forecast Brent crude would average $67.59 a barrel in 2019, down from the $68.84 estimate in May.
Tensions between the United Sates and Iran have also been keeping markets on edge.
A week after Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis.
Record U.S. crude production has also capped oil prices. U.S. crude output in April rose to a fresh monthly record, surpassing 12 million barrels per day, according to a government report on Friday.
U.S. energy firms this week increased the number of oil rigs operating for a second week in a row, bringing the total count to 793, General Electric Co’s Baker Hughes energy services firm said in its closely followed report.