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Oil falls on global slowdown worries, but OPEC cuts offer support

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - fell on Friday, pulled down by worries over a global economic slowdown, although OPEC-led supply cuts and U.S. sanctions against provided crude with some support.

U.S. Intermediate (WTI) crude futures stood at $52.24 per barrel by 0641 GMT, down 40 cents, or 0.8 percent, from their last settlement. WTI dropped by around 2.5 percent the previous session.

International Brent were down by 41 cents, or 0.7 percent, at $61.22 per barrel, after falling 1.7 percent the previous session.

Weighing on financial markets, including crude oil futures, were concerns that trade disputes between the and would remain unresolved, denting global economic growth prospects.

U.S. said on Thursday that he did not plan to meet with Chinese before a March 1 deadline set by the two countries to strike a trade deal.

If there is no agreement between the world's two biggest economies, Trump has threatened to increase U.S. tariffs on Chinese imports. Another round of talks is scheduled for next week in

"Crude prices returned to the lows of the week as slower growth prospects ... could signal a return (of reasons) for inventories to rise," said Edward Moya, at

On Thursday, the sharply cut its forecasts for euro zone economic growth due to global trade tensions and an array of domestic challenges.

The Commission said euro zone growth this year would slow to 1.3 percent from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent.

Despite this, traders said crude prices were prevented from falling much further by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), adopted late last year with the aim of tightening the market and propping up prices.

As part of the cuts, OPEC-kingpin cut its output in January by about 400,000 barrels per day (bpd) to 10.24 million bpd, according to OPEC sources.

That puts Saudi almost 1.7 million bpd below that of the United States, which has been churning out around 11.9 million bpd in late 2018 and early 2019 - up by more than 2 million bpd from a year earlier.

"The OPEC+ meeting in April looms large, and we expect that if the group remains committed to their have further upside," said U.S. investment Jefferies on Friday in a note.

Another risk to supply comes from after the implementation of U.S. sanctions against the OPEC member's petroleum industry in late January. Analysts expect this move to knock out 300,000-500,000 bpd of exports.

For the time being, though, the sanctions impact on international was limited.

"The (Venezuela) disruption overall seems manageable both for the U.S. and the global market," said Norbert Rücker, at Swiss "The sits on a comfortable cushion of supply."

(Reporting by Gloystein; Editing by and Tom Hogue)

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

First Published: Fri, February 08 2019. 12:14 IST