Oil steady on the week as oil supply risks meet economic headwinds

© Reuters. FILE PHOTO: Pump jacks operate at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

By Noah Browning

LONDON (Reuters) -Oil prices edged lower on Friday on course for little change on the week as a planned European ban on Russian oil balanced out investor concerns about weakening economic growth hitting demand.

Brent futures for July were down 10 cents, or 0.1%, to $111.94 a barrel by 0920 GMT, while U.S. West Texas Intermediate (WTI) crude for June fell 56 cents, or 0.5%, to $111.65 on its last day as the front-month.

The more actively traded WTI contract for July (CLc2) was down 0.23 cents at $109.66 a barrel.

The International Monetary Fund (IMF) urged Asian economies to be mindful of spillover risks from monetary tightening.

Asian economies faced a choice between supporting growth with more stimulus and withdrawing it to stabilise debt and inflation, IMF Deputy Managing Director Kenji Okamura said.

While Bank of Japan policy runs counter to a global shift towards monetary tightening, central banks in the United States, Britain and Australia raised interest rates recently.

"If U.S. growth data continues to sour, oil prices could get caught up in the negative stock market feedback loop," SPI Asset Management Managing Director Stephen Innes said in a client note.

Despite higher fuel prices, however, Americans were getting back behind the wheel, according to a report from the Federal Highway Administration on vehicle miles.

The European Union is hoping to clinch a deal on a proposed ban of Russian crude imports which includes carve-outs for EU states most dependent on Russian oil such as Hungary.

"Odds of an EU embargo being declared sooner rather than later increased in the wake of Germany's success in cutting Russian oil imports by more than half in a very short period," consultancy BCA research said in a note.

"Further reductions in Germany’s imports of Russian oil will make it easier for the EU's largest economy to walk away from Russian crude and product imports sooner rather than later."

Iran, meanwhile, is having a tougher time selling its crude now that more Russian barrels are available with Iranian crude exports to China down sharply since the start of the Ukraine war as Beijing buys discounted Russian barrels.