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July Brent crude <LCOc1> fell 72 cents, or 2%, to $34.57 a
barrel by 1203 GMT and the more active August contract also lost
72 cents, or 2%, to $35.31. U.S. West Texas Intermediate (WTI)
crude <CLc1> was down 83 cents, or 2.5%, at $32.88.
Both contracts were on course for their first weekly loss after
four consecutive weeks of gains that leave them set for the
biggest monthly advance in years thanks to production cuts and
optimism over Chinese-led demand recovery, analysts said.
WTI is on track for a record monthly gain of 75% in May, with
Brent set for a 37% increase that would represent its strongest
monthly rise since March 1999.
"The global reaction to China's move to propose new security
laws for Hong Kong continues to increase, while there's a score
of new COVID-19 cases in South Korea," said Rystad Energy's head
of oil markets, Bjornar Tonhaugend.
U.S. President Donald Trump is due to announce his response to
the situation in Hong Kong later on Friday.
Thursday's data from the Energy Information Administration
showed that U.S. crude oil and distillate inventories rose
sharply last week. Fuel demand remained slack even as various
states lifted travel restrictions they had imposed to curb the
coronavirus pandemic, analysts said.
Looking ahead, traders will be focusing on the outcome of talks
on output cuts between the Organization of the Petroleum
Exporting Countries (OPEC) and allies including Russia, a group
known as OPEC+, in the second week of June.
Saudi Arabia and some OPEC members are considering extending
record production cuts of 9.7 million barrels per day beyond
June, but have yet to win support from Russia.
(Additional reporting by Florence Tan in Singapore; Editing by
David Goodman)
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