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U.S. crude stocks rose more than expected last week

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Private reports suggest U.S. labour market weakened in

October

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Gunvor withdraws proposal to buy Lukoil's overseas assets

By Stephanie Kelly

LONDON, Nov 7 (Reuters) - Oil prices rose on Friday but

remained on track for a second consecutive weekly loss after

three days of declines on worries about excess supply and

slowing U.S. demand.

Brent crude futures rose 60 cents, or 1%, to $63.98

a barrel by 0904 GMT. U.S. West Texas Intermediate crude

was up 61 cents, or 1%, at $60.04.

Both benchmarks are poised to register weekly declines of

more than 1.5% as leading global producers raise output.

"The market continues to weigh a rising oil surplus against

mixed macro," said SEB analyst Ole Hvalbye.

An unexpected U.S. inventory build of 5.2 million barrels

reignited oversupply fears this week, said IG Markets analyst

Tony Sycamore.

"This has been amplified by risk-aversion flows, bolstering

the dollar, and the ongoing U.S. government shutdown, which

continues to cloud economic activity," he added.

U.S. crude stocks rose more than expected on higher imports

and reduced refining activity while gasoline and distillate

inventories declined, the Energy Information Administration said

on Wednesday.

Concern over the effects of the longest government shutdown

in U.S. history also pressured oil prices.

The Trump administration has ordered flight reductions at major

airports because of a shortage of air traffic controllers while

private reports are pointing to a weaker U.S. labour market in

October.

The Organization of the Petroleum Exporting Countries and its

allies, known collectively as OPEC+, decided on Sunday to

increase output slightly in December. However, the group also

paused further increases for the first quarter of next year,

wary of a supply glut.

The well-supplied market prompted Saudi Arabia, the world's top

oil exporter, to announce a sharp reduction to prices for its

crude for Asian buyers in December.

European and U.S. sanctions on Russia and Iran, meanwhile, are

disrupting supplies to the world's largest importers, China and

India, providing some support for global markets.

China's crude imports in October rose 2.3% from September and

were up 8.2% from a year earlier at 48.36 million tons, customs

data showed, against a backdrop of high utilisation rates at

refineries in the world's largest oil importer.

Swiss commodities trader Gunvor said on Thursday that it had

withdrawn its proposal to buy the foreign assets of Russian

energy company Lukoil after the U.S. Treasury called

it Russia's "puppet" and signalled that Washington opposed the

deal.

"Gunvor scrapping its Lukoil assets purchase suggests the

U.S. is maintaining its maximum pressure campaign against

Russia, and potential strict enforcement of sanctions on Rosneft

and Lukoil," said Vandana Hari at oil market analysis provider

Vanda Insights.