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SINGAPORE, Aug 19 (Reuters) – Oil prices fell on Friday after two days of increases as market participants weighed concerns over a global economic slowdown that would dampen demand for fuel against expectations of a tightening of supply towards the end of the year.
Brent crude futures fell 68 cents, or 0.7%, to $95.91 a barrel at 0658 GMT after rising 3.1% on Thursday. U.S. West Texas Intermediate crude was at $89.81 a barrel, down 69 cents, or 0.8%, after rising 2.7% in the previous session.
Both benchmark contracts were heading for weekly losses of more than 2%.
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While bullish weekly data in the U.S. has bolstered optimism that near-term fuel demand will improve, lingering recession fears and a possible OPEC+ production boost will likely limit the rise in the price. oil prices, said Satoru Yoshida, commodities analyst at Rakuten Securities.
U.S. crude inventories fell sharply as the country exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding strong demand from European nations seeking to replace crude from Russia at war.
U.S. oil refineries expect to continue operating at full capacity this quarter, according to executives and estimates, as refiners put aside worries about the recession and falling retail prices to supply more fuel. Read more
Increased fuel production in the United States could partly offset lower petroleum product exports from China this year, with Beijing prioritizing the local market to curb domestic fuel inflation. Read more
On supplies, Haitham Al Ghais, new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters that policymakers, lawmakers and insufficient investment in the oil and gas sector are to blame for high oil prices. energy, not its group. Read more
The group and allies such as Russia, known as OPEC+, are due to meet on September 5 to adjust production. OPEC is keen to ensure that Russia remains part of the OPEC+ oil production deal after 2022, Al Ghais said. Read more
In a sign of improving supply, the price differential between fast and second-month Brent futures has narrowed by around $5 a barrel since late July.
Record U.S. crude exports, the resumption of Libyan production and buoyant exports from Russia and Iran eased global supply tensions ahead of peak refinery maintenance. Read more
Still, supplies could tighten again as European buyers start looking for alternative supplies to replace Russian oil ahead of European Union sanctions that come into effect on Dec. 5.
“We calculate that the EU will need to replace 1.2 million barrels per day of seaborne imports of Russian crude with crude from other regions,” consultancy FGE said in a note.
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Reporting by Florence Tan in Singapore and Yuka Obayashi in Tokyo; Editing by Christopher Cushing and Kenneth Maxwell
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