Oil was largely unchanged this week as demand concerns returned to the fore, snuffing out gains driven by Saudi Arabia’s unilateral pledge to cut production.

West Texas Intermediate hovered above USD 71 a barrel, paring this week’s decline to less than 1 percent. Riyadh’s surprise decision to cut output by about 1 million barrels a day last weekend has given way to a worsening outlook for consumption. China’s onshore crude stockpiles reached a two-year high in May as demand fell short of expectations.

“The world economy is slowing – and there are lots of signs of that, particularly in China, where the economic news is increasingly alarming,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.

Oil consumption in Asia’s biggest economy has stagnated at the same time processors have idled facilities for spring maintenance. Data released Friday showed China’s inflation remaining close to zero in May, giving fresh evidence that the world’s second-largest economy was cooling further.

The US oil benchmark has fallen about 14 percent from a mid-April peak on signs that China’s recovery is stalling and the US will need to keep raising interest rates to rein in inflation. Russia’s exports of crude also have been more resilient than anticipated, adding to supply.

Reports in Middle Eastern media — including Israel’s Haaretz newspaper — that the US and Iran had made progress on nuclear talks that could lead to more supply from the Islamic Republic helped push crude down 1.7 percent Thursday. However, US officials said reports of an interim deal are false.