Oil edges up but still set for big weekly loss on demand worries

Oil prices rose on Friday but were still on track for a second consecutive weekly loss after sliding on fears that slower global economic growth would hurt energy demand.

Benchmark Brent crude rose 36 cents, or 0.6%, to $58.07 a barrel by 0839 GMT, while U. S. West Texas Intermediate ( WTI) crude futures rose 30 cents, or 0.6%, to $52.75.

But Brent was down 6.2% on the week while U.S. crude was 5.6%, lower, on the biggest weekly losses since July.

"Both are on track for hefty weekly losses and it will take a brave man to bet against the bearish tide," Stephen Brennock of oil broker PVM said.

"As thing stand, demand and supply-side developments are anything but supportive and there can be no happy ending for those of a bullish disposition," he added.

Weak U.S. services sector and jobs growth data added to worries about global oil demand and exacerbated fears that a protracted U.S.-China trade war could push the global economy into a recession.

Investors are awaiting U.S. non-farm payrolls data due out on Friday to determine the next move.

"Given that U.S. growth is largely supported by a buoyant consumer whose confidence is built on a strong job market, this release will be critical in shaping expectations around future Fed policy which will have spillover effects on oil markets," said Harry Tchilinguirian, global oil strategist at BNP Paribas.

U. S. job growth likely picked up in September, with wages increasing solidly, which could assuage financial market concerns that the slowing economy was teetering on the brink of a recession.

Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, said the world's top crude oil exporter had fully restored oil output after attacks on its facilities last month knocked out more than 5% of global oil supply.

"Low spare capacity, the risk of renewed attacks on oil infrastructure in the Middle East, and likely larger oil inventory declines until the end of 2020 following the sharp drop in Saudi oil output suggest to us that oil prices should trade higher in the short term," UBS oil analyst Giovanni Staunovo said.

France said Iran and the United States have one month to get to the negotiating table, suggesting that Tehran's plan to increase its nuclear activities in November would spark renewed tension in the region.

Meanwhile, some members of Saudi Arabia's ruling family and business elite have expressed frustration with the leadership of Crown Prince Mohammed bin Salman (MBS) following the largestever attack on the kingdom's oil infrastructure last month.

It has sparked concern among several prominent branches of the ruling Al Saud family, which numbers about 10,000, about the crown prince's ability to defend and lead the world's largest oil exporter, according to a senior foreign diplomat and five sources with ties to the royals and business elite, Reuters News Agency reported.

All spoke on condition of anonymity.

The attack has also fanned discontent among some in elite circles who believe the crown prince has sought too tight a grip on power, the sources said.

Some of these people said the event has also fuelled criticism among those who believe he has pursued an overly aggressive stance towards Iran.

"There is a lot of resentment" about the crown prince's leadership, said one of the sources, a member of the Saudi elite with royal connections. "How were they not able to detect the attack?"

This person added that some people in elite circles are saying they have "no confidence" in the crown prince, an assertion echoed by the four other sources and the senior diplomat.

The crown prince nonetheless has staunch supporters.

A Saudi source within circles loyal to the crown prince said: "The latest events won't affect him personally as a potential ruler because he is trying to stop the Iranian expansion in the region. This is a patriotic issue, and so he won't be in danger, at least as long as the father lives."

A second senior foreign diplomat said ordinary Saudis still want to unite behind MBS as a strong, decisive, dynamic leader.

The Saudi government media office did not respond to detailed questions from Reuters for this article.

The crown prince, during a television interview aired on Sunday by US broadcaster CBS, said that defending Saudi Arabia was difficult because of the kingdom's large size and the scale of threats it faces.