Oil Prices Ease, but Brent Still Set for Weekly Gain

Oil prices eased on Friday but Brent was still set to record a weekly gain helped by easing trade tensions and Saudi Arabia's decision to halt crude transport through a key shipping lane.

Brent futures were down 9 cents at $74.45 a barrel by 1349 GMT but on track for the first weekly increase in four.

U.S. West Texas Intermediate futures were 25 cents down at $69.37 and set for a fourth week of declines.

"The major source of bullish impetus stemmed from Saudi Arabia's decision to temporarily halt all oil shipments through the Bab al-Mandeb strait," brokerage PVM's Stephen Brennock said. "Yet even this only had a limited impact in spurring buying pressures, with no sign of actual supply disruptions."

Any move to block the strait would virtually halt oil shipments through Egypt's Suez Canal and the SUMED crude pipeline linking the Red Sea and Mediterranean.

An estimated 4.8 million barrels per day (bpd) of crude oil and refined products flowed through the Bab al-Mandeb strait in 2016 towards Europe, the United States and Asia, according to the U.S. Energy Information Administration.

A breakthrough in U.S.-EU trade talks also lent support to oil prices.

U.S. President Donald Trump and Jean-Claude Juncker, president of the European Commission, reached a surprise agreement on Wednesday that alleviated the risk of an immediate trade war.

"If the U.S.-EU trade talks pull a rabbit out of the hat, that could be very positive for risk appetite, and that could certainly help oil," BNP Paribas oil strategist Harry Tchilinguirian told the Reuters Global Oil Forum.

Russian energy minister Alexander Novak said on Friday the market remained volatile and responded to verbal interventions, adding that the market had priced in risks related to U.S. sanctions against Iran.

He said the Organization of the Petroleum Exporting Countries and its allies were not discussing an option to boost production by more than 1 million bpd.

OPEC and other producers led by Russia agreed last month to ease production curbs. The deal effectively increases combined output by 1 million bpd, with Russia's share at 200,000 bpd.

The market also found support from a big draw in U.S. crude and gasoline stocks last week.

"Gasoline, the big performer of the week, has provided crucial underlying support to the market," said Petromatrix strategist Olivier Jakob.

By Ahmad Ghaddar and Parissa Hedvat, Additional reporting by Aaron Sheldrick in Tokyo