Oil prices pull back as trade tensions weigh on market
U.S. West Texas Intermediate (WTI) crude futures finished Friday's session down 47 cents at $68.49 per barrel. Brent crude futures fell 31 cents to $73.14 per barrel at 2:25 p.m. ET.
WTI also posted its fifth straight weekly loss. Brent is on track for its fourth week of declines in five, set for a drop of more than 1 percent.
"It's a jittery feel here, as long as we have Iranian sanctions uncertainty and tariff uncertainty, and it doesn't take much to spark a significant swing one way or the other," said Jim Ritterbusch, an analyst in Galena, Illinois.
Fears that Chinese demand could taper fueled the pullback on Friday after state oil major Sinopec cut its purchases of U.S. crude. China's Unipec, the trading arm of Sinopec, has suspended crude oil imports from the United States due to the growing trade spat between Washington and Beijing, three sources familiar with the situation said on Friday.
China announced it would impose tariffs on $60 billion in U.S. goods, the latest development in an escalating trade dispute that has raised concerns about a slowdown in economic growth that could ding demand for crude.
Those plans to include tariffs on liquefied natural gas, raising concerns that it could also impose tariffs on oil, f, partner at Again Capital Management in New York.
U.S. nonfarm payrolls rose in July but the U.S. trade deficit recorded its biggest increase in more than 1-1/2 years in June as the boost to exports from soybean shipments faded and higher oil prices lifted the import bill.
The Commerce Department said on Friday the trade gap surged 7.3 percent to $46.3 billion.
Elsewhere, Russian oil output rose by 150,000 barrels per day (bpd) in July from a month earlier, to 11.21 million bpd, energy ministry data showed on Thursday.
Output by top exporter Saudi Arabia has also risen recently, to around 11 million bpd, and U.S. production is around that level as well.
"The sentiment is bearish with OPEC numbers. The spread structure is back in contango, which suggests the market is well supplied so there's a mismatch in timing with OPEC now raising output," Patterson said.
But a complete halt to Iranian supplies looks unlikely with Bloomberg reporting on Friday that China, Iran's biggest customer, has rejected a U.S. request to cut imports from the OPEC member.
Low U.S. stockpiles were still providing a floor for prices, with overall U.S. crude inventories below the 5-year average of around 420 million barrels. But there were concerns about potential stockpile builds as supply returns from a Canadian production facility that has been shuttered.
U.S. drillers cut rigs for the second week in three, reducing the number of oil rigs by 2 to 859. The rig count can be a forward-looking indicator of production.
— CNBC's Tom DiChristopher contributed to this report.