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Oil heads for weekly loss as slowdown worries outweigh supply cuts

Reuters  |  LONDON 

By Nasralla

LONDON (Reuters) - inched down on Friday and were heading for a weekly loss, pulled down by worries about a global economic slowdown, although OPEC-led supply cuts and U.S. sanctions against provided crude with some support.

Weighing on financial markets were concerns that a trade dispute between the and would remain unresolved, denting global economic prospects.

International Brent crude futures were down 14 cents at $61.49 per barrel at 0855 GMT. On the week, they are set for a loss of around 2 percent, the steepest weekly fall this year.

U.S. Intermediate crude futures stood at $52.46 per barrel, down 18 cents, and looking at a 5 percent weekly slump.

U.S. said on Thursday that he did not plan to meet 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.

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

Another factor weighing on this week was a strong dollar.

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

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

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

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 has been limited.

"The (Venezuela) disruption overall seems manageable both for the U.S. and the global market," said Norbert Ruecker, at Swiss

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

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

First Published: Fri, February 08 2019. 14:50 IST