By Stephanie Kelly
NEW YORK (Reuters) -Oil prices edged higher on Friday but posted a weekly decline, under pressure from market expectations of oversupply and uncertainty around tariff talks between the U.S. and China.
Brent crude futures settled 32 cents higher at $66.87 a barrel, taking losses to 1.6% over the week. U.S. West Texas Intermediate crude gained 23 cents to $63.02 a barrel, marking a weekly decline of 2.6%.
China exempted some U.S. imports from its steep tariffs in a sign on Friday that the trade war between the world’s top two economies could be easing, though Beijing quickly knocked down U.S. President Donald Trump’s assertion that negotiations were underway.
"Traders now view further (crude price) gains as unlikely in the short term due to the continued trade war among top global consumers and speculation that OPEC+ may accelerate production hikes from June," Saxo Bank analyst Ole Hansen said.
Oil prices fell earlier this month to four-year lows after tariffs sparked investor concern about global demand and a selloff in financial markets.
While the risk is that a weaker economy will erode demand, supplies could swell.
Several OPEC+ members have suggested the group accelerate oil output increases for a second month in June, Reuters reported earlier this week.
An end to the war in Ukraine also has the potential to add to supplies if it allows more Russian oil to reach global markets.
A three-hour meeting on Friday between Russian President Vladimir Putin and Trump envoy Steve Witkoff was constructive and narrowed differences when it came to ending the war in Ukraine, Kremlin aide Yuri Ushakov said.
In an indication of future supply, the number of oil-directed drilling rigs rose by 2 to 483 in the week to April 25, data from oil services firm Baker Hughes (NASDAQ:BKR) showed on Friday.