Brent inches up on Iran tensions, OPEC; US oil falls on weak data

LONDON: Brent oil ticked higher on Friday, supported by tensions over Iran and this week's decision by OPEC and its allies to extend a supply cut deal until next year, while US benchmark crude prices fell on weak economic indicators.

Front-month Brent crude futures were up 11 cents at $63.41 per barrel by 1220 GMT, while US West Texas Intermediate (WTI) crude futures were down 61 cents at $56.73 per barrel. There was no settlement price on Thursday because of the Independence Day holiday in the United States.

Both benchmarks were set for their biggest weekly falls in five weeks.

In a protracted trade war between the United States and China that dampened prospects of global economic growth and oil demand, representatives of both countries are resuming talks next week to resolve the deadlock.

"The truce between the United States and China is not translating into anything in the real economy in the short term," said Olivier Jakob, Petromatrix oil analyst.

"The negotiations still have to happen and until then we will be looking at very weak manufacturing PMIs," he said referring to Purchasing Managers' Indices which indicate companies' optimism about their sector.

German industrial orders fell far more than expected in May, and the Economy Ministry warned on Friday that this sector of Europe's largest economy was likely to remain weak in the coming months.

In the United States, new orders for factory goods fell for a second straight month in May, government data showed on Wednesday, stoking economic concerns.

The US Energy Information Administration on Wednesday reported a weekly decline of 1.1 million barrels in crude stocks, much smaller than the 5 million barrel draw reported by the American Petroleum Institute earlier in the week and analyst expectations.

Giving a floor to prices was this week's commitment to cut production from the world's largest exporters - including members of the Organization of the Petroleum Exporting Countries and other producers such as Russia, a grouping known as OPEC+.

Ongoing tension in the Middle East offered some limited support.

Iran threatened on Friday to seize a British ship in retaliation for the capture of an Iranian supertanker in Gibraltar by the Royal Marines.

"It is just another sign that the market sentiment is not strong enough to react to those headlines and events, which is quite unusual," Jakob said.

A Reuters survey found OPEC oil output sank to a new five-year low in June, as a rise in Saudi supply did not offset losses in Iran and Venezuela due to US sanctions and other outages elsewhere in the group.