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Oil steadies after U.S.-China talk hopes fade

Reuters  |  NEW YORK 

By Laila Kearney

NEW YORK (Reuters) - prices steadied on Thursday, following a week-long rally, after U.S.-trade talks failed to produce a resolution and weak Chinese data dampened risk appetite.

Brent crude futures fell 13 cents, or 0.2 percent, to $61.31 a barrel, by 11:31 a.m. EST (1631 GMT). U.S. Intermediate crude futures rose 13 cents to $52.49 a barrel.

Both benchmarks rose by around 5 percent the previous day, capping off an eight-day rally that marked oil's longest sustained rise since July 2017.

Global financial markets had surged on renewed optimism that and would soon end their dispute and avert an all-out trade war between the two biggest economies.

But the hope-fueled rise in global markets began to sputter out after the two sides each issued vaguely positive statements that lacked concrete details, helping end a four-day rally in share markets and pushing the U.S. dollar to a near three-month low.

Disappointing data from overnight added to concerns about a global economic slowdown.

China's prices in December rose at their slowest pace in more than two years, a worrying sign of deflationary risks.

"Data out of China, weak inflation and the consummation of China-U.S. talks without any major breakthroughs that we're aware of at this point led to some profit taking after the incredible run we had yesterday," said Phil Flynn, an at in

forecast that Brent will remain range bound at $55 to $65 per barrel as inventories build in the coming months, while it expects "the market will return to a balanced state" by the second half of 2019.

U.S. cut its 2019 price forecasts by more than 10 percent on Wednesday, pointing to weakening economic growth expectations and rising supply.

The main source of new supply is the United States, where has held around a record high of 11.7 million barrels per day since early November, according to government data.

To counter rising output, the Organization of the Petroleum Exporting Countries and its allies, including Russia, reached a deal to rein in supply that officially began in January.

Meanwhile, Iranian said U.S. sanctions against his country were "fully illegal" and would not comply with them.

The OPEC deal had hung in the balance on concerns that Iran, whose crude exports have been depleted by U.S. sanctions, would receive no exemption and block the agreement.

(Additional reporting by in New York, Noah Browning in London and Henning Gloystein in Singapore; Editing by and Edmund Blair)

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

First Published: Thu, January 10 2019. 22:39 IST