Oil fell more than $1 on Friday to record a second straight weekly decline as disappointing Chinese data added to doubts about demand growth after Saudi Arabia’s weekend decision to cut output.
Brent declined by $1.17 or 1.5 per cent to settle at $74.79 a barrel, as the US West Texas Intermediate (WTI) went down by $1.12 or 1.6 per cent to $70.17 a barrel.
Both benchmarks lost more than $3 on Thursday after a media report that a US-Iran nuclear deal was imminent and would result in more supply.
Prices pared losses after both countries denied the report, ending at about a Dollar a barrel lower.
A spokesperson for the White House National Security Council called the report “false and misleading,” while Iran’s mission to the United Nations cast doubt on the report, saying: “Our comment is the same as the White House comment.”
The US and European Union officials have been trying to curb Iran’s nuclear program since the breakdown of indirect US-Iranian talks on reviving the 2015 nuclear deal between Iran and top world powers.
Oil prices had risen early in the week, buoyed by Saudi Arabia’s pledge over the weekend to cut more output on top of the cuts agreed earlier with the Organisation of the Petroleum Exporting Countries and its allies, OPEC+.
The Saudi cut lifted prices slightly, and then the talks of the potential return of Iranian barrels saw a large drop.
However, a rise in US fuel stocks and weak Chinese export data have weighed on the markets.
Exports slumped 7.5 per cent year-on-year in May, data from China’s Customs Bureau showed on Wednesday, much larger than the forecast 0.4 per cent fall and the biggest decline since January.
Equally, imports contracted 4.5 per cent, slower than an expected 8.0 per cent decline and April’s 7.9 per cent fall.
Meanwhile, analysts expect oil prices to rise if the US Federal Reserve pauses hiking interest rates at its next meeting over June 13-14.
The US Federal Reserve’s decision may also influence Saudi Arabia’s next move, some analysts said.
The world’s second-largest economy grew faster than expected in the first quarter thanks to robust services consumption and a backlog of orders following years of COVID disruptions, but factory output has slowed as rising interest rates and inflation squeeze demand in the United States and Europe.