Oil prices edged up in Asian trade on Friday but were on track for a third straight weekly decline, fueled by U.S. President Donald Trump's renewed trade war with China and threats of tariffs on other countries.

Brent crude was up 32 cents at $74.61 a barrel by 0500 GMT, but is expected to drop 2.8% this week. U.S. West Texas Intermediate crude, meanwhile, was up 24 cents at $70.85 a barrel, down about 2.3% for the week.

"Oil prices have stabilized this morning after a volatile session overnight, as traders react to news of U.S. sanctions on Iranian crude exports to China," said Yeap Jun Rong, market strategist at IG.

The U.S. Treasury Department said on Thursday it would impose new sanctions on individuals and tankers that help ship millions of barrels of Iranian crude a year to China, in a gradual move to increase pressure on Tehran

"Nevertheless, oil's gains (today) were limited, reflecting persistent concerns over supply and demand constraints, including potential production increases from OPEC+ and the US, as well as the risk of tariffs weighing on global oil demand," IG's Yeap added.

Trump has announced 10% tariffs on Chinese imports as part of a broad plan to improve the US trade balance, but has shelved plans to impose higher tariffs on Mexico and Canada.

"The downside pressure comes from the tariff news, with concerns over a potential trade war stoking fears of weaker oil demand," analysts at BMI said in a note on Friday. "This has come on top of US President Trump's February 4 executive order reimposing his maximum pressure campaign on Iran, including a commitment to reduce the country's oil exports to zero, from the current level of over 1.5 million barrels per day," BMI analysts said.

Oil prices fell on Thursday after Trump reiterated his pledge to increase US oil production, unsettling traders a day after the country reported a much larger-than-anticipated jump in crude stockpiles.

Benchmark prices were also pressured by swelling U.S. crude inventories, which rose sharply last week as demand fell due to ongoing refinery maintenance.

Source: Investing.com