Brent crude slides, but on track for third week of gains

By Ahmad Ghaddar

LONDON (Reuters) - Brent crude oil fell on Friday after hitting an eight-week high, as weak fundamentals countered a lift in sentiment over talks next month on a possible output freeze, though futures remained

on track to rise for a third consecutive week.

International benchmark Brent futures were trading at $50.50 per barrel at 0840 GMT, down 39 cents from their last close. Brent earlier hit $51.22, its highest since June 22.

U.S. West Texas Intermediate (WTI) crude futures were down 20 cents at $48.02 a barrel after reaching $48.75, their highest since July 5.

"We would argue that improved fundamentals are not a key reason for the recent price bounce," Morgan Stanley said in a note.

"Crude oil demand is anemic, gasoline demand has decelerated globally, and China crude oil imports are likely to decelerate (in the second half of 2016)," the bank said, adding that supply appears set to surprise to the upside in a number of countries.

Iraq has resumed pumping oil from fields operated by the state-run North Oil Company via a Kurdish pipeline to Turkey for the first time since March and at a rate of around 70,000 barrels per day.

Libya's National Oil Corporation began to load a tanker with crude from storage tanks at the country's eastern Zueitina port to move to a local refinery.

While the port, which has been shut since November, remained closed for exports, the loading is a sign that a deal between guards at the facility and the U.N.-backed Government of National Accord in Tripoli is moving forward.

A stronger dollar also weighed on prices as it rose 0.34 percent against a basket of currencies.

Gains in the dollar make dollar-denominated oil less attractive to holders of other currencies.

Oil prices rallied sharply in recent weeks after the announcement of planned talks in Algeria next month between the Organization of the Petroleum Exporting Countries and other major producers including Russia.

However, analysts and traders warned the rally was overblown, saying the talks were unlikely to lead to reduced supply.

Nigerian oil minister Emmanuel Ibe Kachikwu said on Thursday that while a cut in OPEC production is unlikely, there is hope that the Algeria meeting could help shore up crude prices.

(Additional reporting by Mark Tay in Singapore; Editing by Dale Hudson)