* Global trade shows signs of slowdown, growth outlook dims
* Iraq to halt Kirkuk exports to Iran, may resume to Turkey
* Saudi Arabia says oil market could see oversupply
* U.S. drillers add oil rigs for 3rd week -Baker Hughes (Adds CFTC data in paragraph 10)
By Stephanie Kelly
NEW YORK, Oct 26 (Reuters) - Oil prices rose on Friday, supported by expectations that sanctions on Iran would tighten global supplies, but futures posted a weekly drop as a slump in stock markets and concerns about trade wars clouded the fuel demand outlook.
Brent crude futures rose 73 cents, or 1 percent, to settle at $77.62 a barrel. The global benchmark marked a weekly loss of about 2.7 percent and is down about $10 in three weeks.
U.S. West Texas Intermediate (WTI) crude futures rose 26 cents, or 0.4 percent, to end at $67.59 a barrel. It posted a weekly loss of about 2.3 percent.
Prices got some support when two sources said on Friday Iraq will stop trucking crude oil from its northern Kirkuk oil field to Iran in November to comply with U.S. sanctions.
Washington has said it wants to reduce Iranian oil sales to zero, although this looks unlikely. Still, many buyers, including Iran's biggest customer, China, appear to be falling in line, forcing Tehran to store unsold oil on tankers.
"If you move forward and see people playing by the rules, which I don't believe ever really happens, you'll see supply come off and we could run into an issue later," said Michael McAllister, director of equity research at MUFG Securities.
A global collapse in equities has weighed on oil markets.
Financial markets have been roiled by the U.S.-China trade war, a rout in emerging market currencies, rising interest rates and economic concerns in Italy. There are also signs of a slowdown in global trade, with container and bulk freight rates dropping.
"If global demand contracts more than we think, that doesn't bode well for oil demand. GDP and oil demand are pretty well-correlated," said Stewart Glickman, an energy equity analyst at CFRA Research.
The recent market turmoil and forecasts for an increase in supply have caused investors to pull back on bets on higher oil prices. Hedge funds cut their bullish bets on U.S. crude to the most in more than a year, according to U.S. Commodity Futures Trading Commission figures.
Saudi Arabia's OPEC governor said on Thursday oil markets could face oversupply. "The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks," Adeeb Al-Aama told Reuters.
Saudi Energy Minister Khalid al-Falih said there could be a need for intervention to reduce oil stockpiles.
U.S. crude production is soaring, boosted by technological advances. Output this year is forecast to break the annual record in 1970.
U.S. energy firms added oil rigs for a third straight week, keeping the rig count at its highest in over three years, General Electric Co's Baker Hughes energy services firm said. Declining productivity in some shale fields has forced companies to drill more to keep output growing. RIG-OL-USA-BHI
Reporting by Stephanie Kelly in New York, Christopher Johnson in London, Henning Gloystein in Singapore and Aaron Sheldrick in Tokyo; editing by Marguerita Choy and David Gregorio