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NEW YORK: Oil prices fell on Friday and were set to end the week lower for the third straight week, as the market balanced supply fears against renewed economic concerns in the United States and China.

Brent crude futures fell 59 cents, or 0.8%, to $74.39 a barrel by 12:07 p.m. EDT (1707 GMT). West Texas Intermediate (WTI) US crude futures fell 55 cents, or 0.8%, to $70.32.

Both benchmarks are on track to settle about 1% lower week on week. The US dollar clung to modest gains against the euro on Friday and was headed for its biggest weekly gain since February, as uncertainty around the US debt ceiling and monetary policy prompted a shift to safe havens.

A stronger greenback makes dollar-priced oil more expensive for holders of other currencies.

“Lack of confidence in the economy is translating to a retreat to the safer dollar, and is also causing pessimism about oil demand,” said John Kilduff, partner at Again Capital LLC in New York.

Concern mounted that the United States - the world’s biggest oil consumer - will enter recession, with talks over the US government’s debt ceiling postponed and concern growing over another crisis-hit regional bank.

The US Federal Reserve will probably need to raise interest rates further if inflation stays high, Fed Governor Michelle Bowman said on Friday, adding that data this month has not convinced her that price pressures are receding.

Meanwhile, China’s April consumer price data rose at a slower pace than in March, missing expectations, while deepening factory gate deflation refocused doubts about its recovery from COVID restrictions driving oil demand growth.

The market drew some support from the forecast emerging supply deficit for the second half of the year, even as Iraq’s oil minister Hayan Abdel-Ghani told Reuters on Friday he does not expect OPEC+ to decide on further production cuts when it next meets in Vienna on June 4.

An OPEC report on Thursday said the producer group expects July-December demand for its own crude to be 90,000 barrels per day (bpd) higher than previously projected.

The Organization of the Petroleum Exporting Countries (OPEC) kept its global oil demand forecast for 2023 unchanged on Thursday, expecting economic risks to be offset by higher Chinese demand growth.

The market also drew support after US energy secretary Jennifer Granholm signalled that the country could repurchase oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale next month.

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