Oil drops, set for weekly fall on tariff worry and rising supplies

Oil prices edged higher on Friday but were set for a weekly decline, under pressure from market expectations of oversupply and uncertainty around tariff talks between the U.S. and China.

Brent crude futures were up 45 cents to $67.00 a barrel at 1:12 p.m. EDT (1712 GMT), taking losses to 1.5% over the week. U.S. West Texas Intermediate crude gained 45 cents to $63.24 a barrel, headed for a weekly decline of 2.2%.

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 under way.

"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.