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Oil prices headed for second straight weekly loss on demand fears

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By Yuka Obayashi and Sudarshan Varadhan

SINGAPORE (Reuters) -Oil prices looked set to post their second straight weekly loss as prices continued to fall on Friday over demand concerns and scepticism that the United States and Iran could strike a nuclear deal.

Brent crude futures dropped 35 cents, or 0.5%, to $75.61 a barrel by 0304 GMT, while the U.S. West Texas Intermediate crude futures eased 35 cents, or 0.5%, to $70.94.

“Oil prices are expected to stay in a range of about 3 dollars above and below $70 for WTI in the near term,” Satoru Yoshida, a commodity analyst with Rakuten Securities.

Both benchmarks slid by around $1 on Thursday, rebounding from their earlier losses of more than $3, after the U.S. and Iran both denied a report by the Middle East Eye that they were close to a nuclear deal.

For the week, they were on track for losses of about 1% losses, after shedding about the same amount in the previous week.

Oil prices had risen early in the week following Saudi Arabia’s pledge over the weekend for deep output cuts, but they pared gains after rising U.S. fuel stocks and weak Chinese export data.

Yoshida said factors such as fears over tighter supply and higher demand as the United States enters driving season which could drive prices higher were being offset by worries over a slow pickup in China’s fuel demand.

“Crude prices didn’t get any favours from China as their economic recovery has disappointed,” OANDA analyst Edward Moya said.

While a Reuters poll of economists showed the U.S. Federal Reserve could skip a rate hike at its June 13-14 meeting, the absence of similar signals from other major central banks was weighing on the oil demand outlook, Moya added.

(Reporting by Yuka Obayashi and Sudarshan Varadhan; Editing by Shri Navaratnam)

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