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Investing.com -- Oil prices slipped lower Friday, and are on track for hefty weekly losses as soft economic prints from the U.S. and China ramped up concerns over slowing demand, ahead of next week’s OPEC+ meeting.
At 09:15 ET (13:15 GMT), Brent oil futures for July fell 0.6% to $61.78 a barrel, while West Texas Intermediate crude futures fell 0.6% to $58.87 a barrel.
Crude prices were headed for steep weekly losses of around 6%, weighed by data showing the U.S. economy in contraction in the first quarter, while activity data in China pointed to a contracting manufacturing sector.
Additionally, U.S. job growth slowed marginally in April, as nonfarm payrolls increased by 177,000 jobs last month after rising by a downwardly revised 185,000 in March, the Labor Department said on Friday.
It is too early for the labor market to show the impact of Trump’s on-and-off again tariffs policy.
China says it’s open to US trade talks
That said, the crude market received a boost after China’s commerce ministry said on Friday that the country was evaluating the possibility of trade talks with the U.S., although it emphasized that any dialogue must be sincere and preceded by the removal of unilateral tariffs.
The comments come after state media reported earlier this week that U.S. officials had reached out to China to open trade negotiations. Recent comments from U.S. officials also signaled some openness to dialogue.
Any opening of trade talks potentially marks a deescalation in a trade war between the two countries, after they imposed trade tariffs of over 100% on each other through April.
The trade conflict was a major point of uncertainty for oil, given that it involves the world’s two largest oil consumers. Threats of more tariffs from U.S. President Donald Trump, along with Beijing initially striking a hardline stance of trade talks, had rattled oil prices earlier this year.
Markets feared that economic ructions stemming from a prolonged trade conflict will hurt global oil demand.
OPEC+ meeting could see production hikes
Focus was now squarely on an upcoming OPEC+ meeting, scheduled for May 5, for more cues on the cartel’s plans to increase production.
Reuters reported earlier this week that Saudi Arabia, the de facto leader of OPEC+, has signaled to allies that it is unwilling to further support oil prices with more supply cuts. Earlier reports showed several OPEC+ members were also preparing to announce output hikes for June, as they scale back production cuts from over the past two years.
The production group’s willingness to increase output comes amid persistent calls from President Trump for higher oil supplies and lower prices.
"OPEC+ is scheduled to review production levels for June on Monday, with expectations for another supply boost, potentially similar to the 411k b/d surge announced earlier," said analysts at ING, in a note.
Preliminary OPEC production numbers for April are starting to come through.
Bloomberg’s OPEC survey shows that the group’s production fell by 200k b/d month-on-month to 27.24m b/d last month. This reduction was largely driven by Venezuela (accounting for about half of the fall) as major producers such as Chevron Corp. (NYSE:CVX) wind down operations while the US administration tightens sanctions. Meanwhile, output in the UAE and Nigeria also decreased by 80k b/d and 60k b/d, respectively.
(Ambar Warrick contributed to this article.)