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UPDATE 8-Oil set for weekly fall as U.S.-China trade tensions weigh

Collin Eaton

* Higher U.S. tariffs kick in on some Chinese goods

* Trump says no hurry to sign deal with China

* Sinopec, CNPC skip Iran oil for May to avoid U.S. sanctions (Updates prices, adds commentary, trade talks, U.S. refining demand, Chinese refiners skipping May Iran oil purchases)

HOUSTON, May 10 (Reuters) - Oil prices edged up on Friday on tightened global supplies and expectations of rising U.S. refining demand but were set to end the week slightly lower due to trade tensions stoked by a U.S. move to hike tariffs on Chinese goods.

Brent crude oil was up 41 cents at $70.80 a barrel by 12:44 a.m. CST (1744 GMT), having touched a peak of $71.23.

U.S. West Texas Intermediate (WTI) crude futures were up 15 cents at $61.85, having earlier hit $62.49.

Both contracts were on track for weekly losses of about 0.1%, after a volatile week with investors worried over the possibility of a protracted and bitter U.S.-China trade war, despite last-minute efforts to salvage a deal.

U.S. President Donald Trump on Friday said he was in no hurry to sign a trade deal with China as Washington imposed a new set of tariffs on Chinese goods and negotiators ended a second day of talks.

Growing trade tensions between the world's two largest oil consumers could affect oil demand. The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.

Prices gained on Friday as investors anticipated U.S. Gulf Coast and Midwestern refineries, which are coming out of seasonal maintenance periods, to boost oil demand ahead of the U.S. summer driving season.

"Crude oil has more potential for upside," said Tom Kloza, chief oil analyst at the Oil Price Information Service. "With Gulf refineries starting up, demand is going to be significantly above supply for the next 100 days or so."

Investors also focused on tightened supplies following OPEC-led production cuts since the start of the year. Investors believe the Organization of Petroleum Exporting Countries and its producer allies will extend the six-month output-cut agreement in coming weeks.

"We're waiting to see whether the Saudis signal their extension of the production cut," in coming weeks, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "The market is finding its next driver."

Markets have been buoyed further by Washington's bid to cut Iran's oil exports to zero. The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year.

It initially allowed Iran's biggest buyers to continue purchasing oil via waivers for another six months, but those exemptions ended at the beginning of May.

China Petrochemical Corp (Sinopec Group) and China National Petroleum Corp (CNPC), the country's top state-owned refiners, are skipping Iranian oil purchases for loading in May after Washington ended sanction waivers to turn up pressure on Tehran, three people with knowledge of the matter said.

(Additional reporting by Ahmad Ghaddar in LONDON, Aaron Sheldrick in TOKYO and Colin Packham in SYDNEY Editing by Marguerita Choy and Phil Berlowitz)