Oil prices fall with stock market; Brent marks weekly gain

NEW YORK: Oil prices fell on Friday, weighed down by a drop in the U.S. equities market, but Brent still marked a weekly increase, supported by easing trade tensions and a temporary shutdown by Saudi Arabia of a key crude oil shipping lane.

Brent crude futures fell 25 cents to settle at $74.29 a barrel, but notched a 1.8 percent weekly increase, its first increase in four weeks.

U.S. West Texas Intermediate (WTI) crude futures fell 92 cents to settle at $68.69 a barrel, and marked a fourth week of declines, falling about 2.4 percent.

Depressing oil prices, U.S. stock markets broadly fell on Friday.

Crude futures at times track with equities.

"That could show some sign of a slowdown in the economy, which could in turn affect oil consumption," said Phillip Streible, senior market strategist at RJO Futures.

The oil market largely brushed off government data on Friday that said the U.S. economy grew in the second quarter at its fastest pace in nearly four years.

"It was a strong number that suggests strong energy demand into the end of the year," said Phil Flynn, analyst at Price Futures Group in Chicago. "The reason why we're not rallying off that is because it came in line with expectations, but when you're running that kind of a GDP, that's a lot of oil."

U.S. energy companies added three oil rigs in the week to July 27, the first time in the past three weeks that drillers have added rigs, General Electric Co's Baker Hughes energy services firm said on Friday.

Hedge funds trimmed their bullish wagers on U.S. crude, cutting their combined futures and options position in New York and London by 11,362 contracts to 412,289 in the week to July 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. That was the lowest level since late June, the data showed.

Russian energy minister Alexander Novak said on Friday the market remained volatile and responded to verbal interventions, adding that the market had priced in risks related to U.S. sanctions against Iran.

He said the Organization of the Petroleum Exporting Countries and its allies were not discussing an option to boost production by more than 1 million barrels per day (bpd).

OPEC and other producers led by Russia agreed last month to ease production curbs. The deal effectively increases combined output by 1 million bpd, with Russia's share at 200,000 bpd.

Saudi Arabia earlier in the week said it was suspending oil shipments through the Red Sea's Bab al-Mandeb strait, one of the world's most important tanker routes, after Yemen's Iran-aligned Houthis attacked two ships in the waterway.

Any move to block the strait would virtually halt oil shipments through Egypt's Suez Canal and the SUMED crude pipeline linking the Red Sea and Mediterranean.

An estimated 4.8 million bpd of crude oil and refined products flowed through the Bab al-Mandeb strait in 2016 toward Europe, the United States and Asia, according to the U.S. Energy Information Administration.

A breakthrough in U.S.-EU trade talks also lent support to oil prices this week. U.S. President Donald Trump and Jean-Claude Juncker, president of the European Commission, reached a surprise agreement on Wednesday that alleviated the risk of an immediate trade war.