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By Ahmad Ghaddar
LONDON - Oil prices declined on Friday, with Brent slipping away from the $70 mark reached the previous day, but both main contracts were set for weekly gains due to mounting geopolitical risks.
Brent crude futures dropped 16 cents to $69.24 a barrel by 0856 GMT, having touched $70.03 in the previous session, the highest since Nov. 12.
U.S. West Texas Intermediate (WTI) crude fell 4 cents a barrel to $62.06, having hit their highest since Nov. 7 on Wednesday at $62.99.
Brent and WTI are on track for their second and fifth consecutive weeks of gain, respectively.
Weighing on prices are concerns that an economic slowdown could dent fuel consumption.
"At the heart of this late retreat in oil prices were lingering trade jitters," said Stephen Brennock of oil brokerage PVM.
The United States and China, the world's two biggest oil consumers, could be close to ending their trade dispute though some hurdles remain.
U.S. President Donald Trump on Thursday said the two sides were "very close to making a deal", though the United States remains hesitant to lift $250 billion in tariffs that China is seeking to have removed.
"The geopolitics around Libya and Venezuela, alongside the possible reflation of risk appetite on positive U.S.-China trade talks may well pull the market out of its morning doldrums," Harry Tchilinguirian, global oil strategist at BNP Paribas, told the Reuters Global Oil Forum.
Eastern Libyan commander Khalifa Haftar ordered his troops on Thursday to march on the capital Tripoli, escalating a conflict with the internationally recognised government.
Any potential oil outages in Libya would "noticeably increase the pressure on Saudi Arabia to open up the oil tap again, as it did in the autumn," Commerzbank said in a note.
The Organization of the Petroleum Exporting Countries and producer allies such as Russia agreed to cut output by 1.2 million barrels per day (bpd) this year to prop up prices.
Venezuela's deputy foreign minister said on Thursday he does not rule out that more Russian military personnel may arrive in Venezuela under agreements already concluded between the two countries.
Somewhat undermining the OPEC-led effort to prop up the market is surging U.S. oil production, which rose to a record 12.2 million bpd last week, official data showed.
As a result, U.S. crude oil stockpiles soared last week, the Energy Information Administration said on Wednesday.
(Additional reporting by Aaron Sheldrick in TOKYO and Henning Gloystein in SINGAPORE; Editing by Dale Hudson)