© Reuters.

By Barani Krishnan

Investing.com – The year’s biggest events for oil – more OPEC production cuts and a possible resolution to the trade war – have delivered more disappointment than joy for oil bulls this week.

Oil prices moved higher in New York and London in light trading as U.S. markets reopened from the U.S. Independence Day holiday.

But both U.S. West Texas Intermediate crude and U.K. posted weekly losses on lingering demand worries, despite promises of tighter OPEC supply extending into March 2020.

Oil prices were also down on the week on concerns that a potential breakthrough in U.S.-China trade talks at the G20 meeting in Japan might be bigger on hype than delivery.

New York-traded settled up 17 cents, or 0.3%, to $57.51 per barrel by. WTI fell about 1% on Thursday in UK and Asian trading.

London-traded , the benchmark for oil outside of the U.S., rose 93 cents, or 1.5%, to $64.23. Brent had settled down nearly 1% in the previous session

For the week, however, WTI fell 1.6%, its sharpest slide in 3 weeks. slid 0.8%.

Friday's oil-price drop came amid a stellar U.S. employment report for June that was believed by many analysts to trim the chances of a Federal Reserve rate cut later this month. The U.S. added 224,000 jobs in June versus a forecast growth of 160,000.

It was a turbulent week for oil which initially rallied on the feel-good news of progress in trade talks between U.S. President Donald Trump of the U.S. and China President Xi Jinping.

Russian leader Vladimir Putin’s announcement that his nation and Saudi Arabia – the forces behind the OPEC+ pact – will continue leading efforts to shed 1.2 million barrels per day through March also underpinned sentiment.

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 U.S. sanctions and other outages elsewhere in the group, a Reuters survey found.

Despite that, slides showing OECD overhang of oil stocks at 10 times higher to 2010-14 levels raised questions on whether nine months of extended OPEC cuts would be enough to rebalance the market.

A much smaller-than-expected decline in U.S. crude inventories for last week added to worries that demand may be fading even in the peak U.S. summer driving season.

Remarks in Beijing’s state media on Friday that China will not buy American agriculture products if the United States “flip-flops” again in future trade negotiations also undermined the positive tones on bilateral trade negotiations set by Trump and Xi.

“Oil prices are lower as global growth concerns seem to be outweighing rising geopolitical risks,” Phil Flynn, senior market analyst for energy at Price Futures Group in Chicago said, citing weak German industrial orders and a second monthly slump in U.S. factory orders in May.

So intense were the worries over oil demand from a weak global economy that even reports that the British Royal Marines helped the authorities in Gibraltar seize an Iranian ship on Thursday did only a little to rally the market.

Iran’s Foreign Ministry summoned the British ambassador to voice “its very strong objection to the illegal and unacceptable seizure” of its ship, which was headed to Syria in breach of EU sanctions. The news elevated tensions in the Middle East and could potentially disrupt supply.

“This is the first time that the EU has done something so public and so aggressive. I imagine it was also coordinated in some manner with the U.S. given that NATO member forces have been involved,” said Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman, in a CNBC report.

Spanish authorities said the seizure was made at the request of the United States. Authorities said they believed the crude oil was being shipped to a Syrian refinery in violation of European Union sanctions against Syria.