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Oil falls nearly 2 percent amid global economy concerns but ends week higher

Reuters  |  NEW YORK 

By Laila Kearney

NEW YORK (Reuters) - Oil prices fell nearly 2 percent on Friday as investors worried about a global economic slowdown, snapping a nine-day winning streak spurred by U.S.-trade hopes, but clung to some gains from that rally to end the week higher.

Brent crude futures dropped $1.2 to settle at $60.48 a barrel, a 1.95 percent loss. Intermediate (WTI) crude futures were down $1 to settle at $51.59 a barrel, or 1.9 percent.

Still, both benchmarks saw their second week of gains, with Brent rising about 6 percent and WTI up about 7.6 percent.

The global crude benchmark on Thursday posted its first consecutive nine-day rally since September 2007. WTI, which also hit its ninth straight day of gains, beat a 2010 record.

Rising expectations that an all-out trade war between and might be averted supported markets earlier in the week. Three days of talks between the two economic superpowers concluded on Wednesday with no concrete announcements, but higher-level discussions may convene later this month.

"After a number of days higher, the market is just taking a breather," said Tony Headrick, an market analyst at St. Paul,

Market participants remained cautious about a slew of recent economic data that has raised concerns about a global economic slowdown.

plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year's target of "around" 6.5 percent, policy sources told Reuters, as gears up to cope with higher tariffs and weakening domestic demand.

"If we experience an economic slowdown, crude will underperform due to its correlation to growth," said Hue Frame, at in

On the supply side, have received support from supply cuts by the Organization of the Petroleum Exporting Countries and non-OPEC members including The deal is aimed at shrinking a glut that emerged in the second half of 2018.

has reduced its to 11.38 million barrels per day (bpd) on average on Jan. 1-10 from a record high of 11.45 million bpd last month, a source familiar with the data told on Friday.

from since November, when resumed sanctions against the OPEC producer, have also supported crude.

Playing a key part in the emerging glut was the United States, where has soared to a record 11.7 million barrels per day.

Consultancy this week said it was likely that U.S. crude production was "significantly above 12 million bpd" by this month.

U.S. firms, however, this week cut four oil rigs, the second week of declines, General Electric Co's firm said, as producers turned conservative in their 2019 drilling plans due to uncertainty over a recovery in crude prices. [RIG/U]

(Additional reporting by Noah Browning in London, Henning Gloystein in Singapore, Stephanie Kelly and Scott DiSavino in New York; Editing by and Marguerita Choy)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, January 12 2019. 03:16 IST