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Oil Holds Weekly Gain as Tighter Supply Offsets Weaker Demand

By Saket Sundria and Grant Smith

(Bloomberg) Oil held steady amid signs of weaker demand, but remained on track for the biggest weekly gain in more than a month as supplies tightened.Futures were little changed in New York, on course for a weekly increase of more than 4%. U.S. government data on Wednesday showed a surprise pullback in the nation’s crude stockpiles last week, and on Thursday a critical North Sea pipeline was briefly halted by a power loss. Yet weak economic data from Germany and South Korea fanned concerns that world fuel demand is flagging, and the U.S.-China trade clash continued to put a dampener on investor sentiment.

Oil set for weekly advance as crude market tightens

“The near-term fundamentals are actually tight,” Abhishek Deshpande, head of global oil-market research at JPMorgan Chase & Co., said in a Bloomberg television interview. “If you were to see any positive trade dialogue emerging,” then “you could see a quick switch in investor positioning.”

Oil is down about 16% from an April peak as the trade spat between Washington and Beijing dents demand, though President Donald Trump has raised expectations that he and Chinese President Xi Jinping will sign a phase-one deal in Chile next month.

West Texas Intermediate for December delivery lost 10 cents to $56.13 a barrel on the New York Mercantile Exchange as of 10:18 a.m. London time. The contract added 26 cents to close at $56.23 on Thursday. Prices are up 4.4% this week, the most since the week ended Sept. 20.

Brent for December settlement was almost unchanged at $61.66 a barrel on the London-based ICE Futures Europe Exchange. Prices are 3.8% higher this week. The global benchmark crude traded at a $5.51 premium to WTI.

Other oil market news
  • The North Sea Forties pipeline system has begun to restart following a power loss, operator Ineos Group Holding SA said Thursday afternoon.
  • Companies still doing business with a U.S.-sanctioned unit of China’s biggest shipping company have less than 60 days to wind down their transactions.
  • Russian oil production was about 47,000 barrels a day above its OPEC+ target in the first three weeks of October, the narrowest gap since the Druzhba crude contamination incident earlier in the year.
  • Iraq’s oil exports were cut by 150,000 barrels a day in October as the country committed to the OPEC output deal, Deputy Oil Minister Fayyad Al-Nima said in Baghdad.

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