Crude oil prices were heading for weekly losses on Friday for the week ending Jan. 17 as U.S.-China trade deal calmed worries amid weak global oil demand this year, but U.S. crude production reaching record high raised the issue of oversupply again.
The U.S. and China signing the phase one trade deal has put a pause on the trade war between the world's two largest economies and oil consumers for the moment.
The sides will now start working on a phase two deal, which gives hope to investors that global oil demand could be higher than anticipated this year.
If, however, agreeing on a phase two deal prolongs, or the sides would fail to reach an agreement, these could hurt demand and push crude prices lower.
On the supply side, crude oil production in the U.S. has hit a new all-time highest level of 13 million barrels per day for the week ending Jan. 10, according to data released by the Energy Information Administration (EIA) on Wednesday.
The new record high level increased worries that the glut of supply in the global oil market would remain this year, despite deeper cuts by OPEC and its allies that began to be implemented at the beginning of this month.
On Wednesday, international benchmark Brent crude lost 0.76%, while American benchmark West Texas Intermediate (WTI) fell 0.72%, partly also due to rising gasoline inventories that jumped by 6.7 million barrels for week ending Jan. 10, the EIA data showed.
Brent crude rose by 0.97% and WTI jumped by 1.23% on Thursday to recover.
Price of Brent oil was trading at $64.86 per barrel at 1225 GMT on Friday for a 0.41% weekly loss after it opened Monday at $65.13 a barrel.
WTI was trading at $58.74 a barrel at the same time for a weekly loss of 0.51% after it started the week at $59.04 per barrel.
By Ovunc Kutlu