Picture: ISTOCK
Picture: ISTOCK

Tokyo/London — Oil prices fell on Friday and were set for a second straight week of decline after Libyan ports reopened and on the view that Iran might still export some crude despite US sanctions.

Brent crude was down 36 US cents, or 0.5%, at $74.09 per barrel by 11.25am GMT, having fallen 1.3% earlier. It was heading for a weekly fall of about 4%. US benchmark West Texas Intermediate crude lost 12c to $70.22, and was also set for a weekly fall of about 4%.

Oil approached $80 in late June and early July due to Libyan and Venezuelan supply disruptions and fears the US would press all buyers of Iranian oil to cut imports to zero from November.

But prices weakened in recent days as oil cartel Opec member Libya reopened its ports in the east and US secretary of state Mike Pompeo said Washington would consider granting waivers to some of Iran’s crude buyers.

Prices also slid amid broader market fears that a US-China trade dispute could hit global economic growth.

"While the oil market could not escape the mounting trade tension and souring sentiment in financial markets, the sell-off was more about signs of rising supplies," Julius Baer analyst Carsten Menke said.

"If Iran were blocked from the market, we believe oil prices would rise towards $90 per barrel, which would cause significant fuel inflation, weigh on consumer and business sentiment and eventually hurt the economy," he added.

The International Energy Agency (IEA) warned on Thursday that the world was short of spare supply capacity and hence any new disruption could further elevate oil prices.

"Underpinning this morning’s bout of malaise are downbeat oil demand figures from China. The world’s biggest importer of crude curbed its purchases last month to a 2018 low," said Stephen Brennock from PVM brokerage.