Oil falls but on track for third weekly rise on trade hopes

 Oil falls but on track for third weekly rise on trade hopes

By Laila Kearney

NEW YORK (Reuters) - Oil was down about 1% on Friday, but prices were set for a third straight weekly gain amid the easing of U.S.-China trade tensions, which has boosted business confidence and the outlook for global economic growth.

Brent was down 58 cents at $65.96 a barrel by 12:11 p.m. EST (1711 GMT), but marking a weekly rise of around 1%. U.S. West Texas Intermediate crude was down 95 cents at $60.23 per barrel, but has gained around 0.4% on the week.

Progress in the trade dispute between the world's two biggest oil consumers has raised expectations of higher energy demand next year.

China on Thursday announced a list of import tariff exemptions for six oil and chemical products from the United States, days after Washington and Beijing said an interim trade deal is set to be signed in January.

Advancement of the U.S.-Mexico-Canada Agreement (USMCA), which is set to replace the North American Free Trade Agreement (NAFTA), has also boosted oil this week. The agreement was passed by the U.S. House of Representatives on Thursday.

"The oil market in general has been supported from good news on the trade front," said Andy Lipow, president of Lipow Oil Associates in Houston.

Some selling ahead of the Christmas and New Year holidays was pushing prices lower, said Phil Flynn, an analyst at Price Futures Group in Chicago.

U.S. economic growth nudged up in the third quarter, the government confirmed on Friday, and there are signs the U.S. economy more or less maintained the moderate pace of expansion as the year ended, supported by a strong labour market.

The end of 2019 offered much noise but little direction and prices were treading water on average, Julius Baer analyst Carsten Menke said. "Looking forward into 2020, commodities as an asset class should continue to trade range-bound for most of the year."

A U.S. weekly drilling report by energy services firm Baker Hughes is due on Friday. Analysts say an expected fall in U.S. drilling activity should support oil prices.

Meanwhile, oil sector workers in France could decide on Friday whether to halt production at refineries to scale up a protest.

(Additional reporting by Bozorgmehr Sharafedin in London and Jane Chung in Seoul; editing by Susan Fenton/Alexander Smith/Jane Merriman)

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Updated Date: Dec 21, 2019 00:06:12 IST