By Jessica Resnick-Ault
NEW YORK (Reuters) - Crude prices edged higher on Friday, but retreated from session highs and were headed for another weekly decline on worries that oversupply would weigh on the U.S. market while trade disputes and slowing global economic growth would slow demand for oil.
U.S. crude was on track for its seventh consecutive weekly decline and global benchmark Brent was set to drop for a third week.
"One of the biggest concerns out there is that China's demand numbers are coming down if China's GDP growth is slowing," said Tariq Zahir, managing member at Tyche Capital in New York.
Brent crude oil futures were up 9 cents at $71.52 a barrel by 1:04 p.m. EDT (1604 GMT), after rising over $1 to hit a session high of $72.44 a barrel.
U.S. West Texas Intermediate (WTI) crude futures rose 13 cents to $65.59, after touching a session high of $66.39.
For the week, Brent was heading for a 1.8 percent loss, and U.S. crude on track to end 3 percent lower.
Friday's pull back from session highs came on mounting worries that U.S. crude inventories would post another consecutive gain, said Bob Yawger, director of futures at Mizuho Americas.
U.S. government data this week showed a large build up in crude inventories, with production also increasing. [EIA/S]
"Investors remain cautious as Wednesday's surprise gain in U.S. stockpiles remained fresh in their minds," ANZ bank said on Friday.
U.S. oil rigs were unchanged in the week at 869 rigs, according to a weekly report from energy company Baker Hughes on Friday.[RIG/U] Changes in the number of drilling rigs can indicate future production trends.
Another major drag on prices was the darkening economic outlook on trade tensions between the United States and China, and weakening emerging market currencies that are weighing on growth and fuel consumption, traders and analysts said.
U.S. investment bank Jefferies said there was a "lack of demand" for crude oil and refined products from emerging markets, while Singapore's DBS bank said that Chinese data showed a "steady decline" in activity and that "the economy is facing added headwinds due to rising trade tensions".
Japan's MUFG Bank, meanwhile, said that the weakening Turkish lira will constrain further growth in gasoline and diesel demand this year.
"Although emerging market contagion and China slowdown fears seem somewhat overstated, neither fundamental nor sentiment should provide support for higher commodity prices," Julius Baer Head of Macro and Commodity Research Norbert Rücker said.
Furthermore, just as demand seems to be slowing, supply looks to be rising, increasing the drag on markets.
Despite the bearish factors, analysts said prices were prevented from falling further because of U.S. sanctions against Iran, which target the financial sector from August and will include petroleum exports from November.
"Iranian crude exports were still near 2 million barrels per day (bpd) in July and will likely begin to fall dramatically in August with financial sanctions taking effect. With oil export sanctions now three months out, we expect exports to fall by more than 500,000 bpd by the end of 3Q," Jefferies said.
(Reporting by Aaron Sheldrick in TOKYO, Henning Gloystein in SINGAPORE and Dmitry Zhdannikov in MOSCOW; Editing by Marguerita Choy and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Aug 18, 2018 00:05:42 IST