UPDATE 11-Oil falls on China-U.S. tensions, energy demand doubts

Reuters

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    * China plan for HK security law raises tensions with U.S.
    * Beijing fails to set target for economic growth this year
    * Brent and WTI gained 8% and 13%, respectively, this week
    * U.S. rig count hits record low for third week -Baker
Hughes

 (Adds CFTC data)
    By Stephanie Kelly
    NEW YORK, May 22 (Reuters) - Oil prices tumbled about 2% on
Friday on rising U.S.-China tensions and doubts about how
quickly fuel demand would recover from the coronavirus crisis.
    Fuel demand plummeted in recent months as the pandemic
caused governments to impose restrictions on movement and
businesses closed their doors. Oil has rallied in recent days as
activity started to resume.
    But prices dropped after China said on Friday it would not
publish an annual growth target for the first time. Beijing 
also pledged more government spending as the pandemic kept
hammering the economy.  urn:newsml:reuters.com:*:nL4N2D40KJ
    "The coronavirus has nullified a decade of global oil demand
growth and the recovery will be slow," said Stephen Brennock of
broker PVM.
    Brent crude futures  LCOc1  fell 93 cents, or 2.6%, to
settle at $35.13 a barrel. U.S. West Texas Intermediate (WTI)
crude  CLc1  ended 67 cents, or 2%, lower at $33.25 a barrel.
    China is set to impose new national security legislation on
Hong Kong after last year's pro-democracy unrest, a Chinese
official said on Thursday, drawing a warning from President
Donald Trump that Washington would react "very strongly."
 urn:newsml:reuters.com:*:nL4N2D32O6
    For the week, Brent and WTI gained 8% and 13%, respectively,
but some said they may have come too far, too fast.
    "A second wave (of the coronavirus) is not such a remote
possibility and a new round of lockdowns could send prices back
to much lower levels very quickly, and the market knows it,"
said Rystad Energy senior oil markets analyst Paola Rodriguez
Masiu.
    Oil prices have plummeted more than 40% so far in 2020. The
recent rebound was due in part to efforts by the Organization of
the Petroleum Exporting Countries and allies to reduce supply.
OPEC+ is reducing supply by a record 9.7 million barrels per day
from May 1.
    The U.S. rig count, an indicator of future output, fell by
21 to a record low 318 this week, according to energy services
firm Baker Hughes Co's  BKR.N  data going back to 1940.
 RIG-OL-USA-BHI ,  RIG-GS-USA-BHI   urn:newsml:reuters.com:*:nL1N2D318I
    In a sign of the glut easing, U.S. crude inventories fell
last week.
    Money managers raised their net long U.S. crude futures and
options positions in the week to May 19 by 23,229 contracts to
380,211, the U.S. Commodity Futures Trading Commission (CFTC)
said on Friday. 
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Weekly changes in petroleum stocks in the U.S.    https://tmsnrt.rs/3fMVOzX
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Stephanie Kelly in New York, additional reporting
by Alex Lawler in London and Aaron Sheldrick in Tokyo; Editing
by Marguerita Choy, Tom Brown and David Gregorio)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))

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