Oil prices edged lower on Friday, as concerns about China’s economy outweighed bullish signals from its refining sector, but losses were limited on hopes for progress toward a U.S.-China trade agreement.
Benchmark Brent crude oil futures fell 65 cents, or 1.1%, to $59.26 a barrel by 1:06 p.m. EDT (1706 GMT). U.S. West Texas Intermediate (WTI) crude futures lost 34 cents, or 0.6%, to $53.59 a barrel.
Both Brent and WTI were on track to lose 2% for the week.
China’s economic growth slowed to 6% year-on-year in the third quarter, its weakest in 27-1/2 years and short of expectations due to soft factory production and continuing trade tensions with the United States.
China’s September refinery throughput, however, rose 9.4% year on year, a signal that petroleum demand from the world’s biggest oil importer remained robust despite economic headwinds.
U.S. and Chinese trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.
“For now, trade related concerns over a slowed global economic growth path have been pushed to the sidelines as markets await additional guidance regarding U.S.-Chinese trade negotiations,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a report.
The ongoing dispute has increased worries about a global recession that would dent demand for oil.
The Forties oil and gas pipeline system (FPS) in the British North Sea reopened as planned on Friday after being halted for a few hours by a power surge resulting from a lightning strike, operator Ineos said.
The system transports the Forties crude oil stream that makes the biggest contribution to the Brent benchmark.
In the United States, falling product stocks countered higher U.S. crude oil stocks, which rose by 9.3 million barrels in the week to Oct. 11.
U.S. energy firms this week increased the number of oil rigs operating for a second week in a row for the first time since June. Companies added one oil rig in the week to Oct. 18, bringing the total count to 713, General Electric Co’s Baker Hughes energy services firm said on Friday. <RIG-OL-USA-BHI>
The joint technical committee monitoring a global oil production pact between the Organization of the Petroleum Exporting Countries (OPEC) and partners found that compliance is being exceeded, with cuts for September representing 236% of agreed quotas, sources said.
OPEC and its allies, including Russia, have agreed to limit oil output by 1.2 million barrels per day (bpd) until March 2020.
OPEC lowered its 2019 global oil demand growth forecast to 0.98 million bpd while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, its latest monthly report said.