Oil prices dip as worries over economic slowdown return

Friday,   11-Jan-2019   09:01 AM (IST)

Oil prices slipped on Friday as concerns over economic growth were rekindled after talks fell short of offering concrete steps to end the Sino-U.S. trade conflict, although OPEC-led production cuts bolstered sentiment in crude markets. Oil prices were also supported by comments from U.S. Federal Reserve Chairman Jerome Powell on Thursday that the central bank had the ability to be patient on monetary policy. International Brent crude futures (LCOc1) were at $61.22 per barrel at 0139 GMT, down 46 cents, or 0.75 percent, from their last close. However, Brent remains on track for a second consecutive week of gains as it is up about 7 percent so far this week. U.S. West Texas Intermediate (WTI) crude futures (CLc1) dropped 34 cents, or 0.65 percent, to $52.25 per barrel. WTI has climbed 9 percent this week, its biggest weekly rise since December, 2016. China said three days of talks with the United States that wrapped up on Wednesday had established a "foundation" to resolve differences over trade. But it gave few details on key issues at stake, including a scheduled U.S. tariff increase on $200 billion worth of Chinese imports. A partial U.S. government shutdown and tepid economic data in some countries also dragged on broad financial markets. China's producer prices in December rose at their slowest pace in more than two years, a worrying sign of deflationary risks that could see Beijing roll out more policy support to help stabilize the economy. Asia's Iranian oil imports were set to rise from December onwards as the United States granted temporary waivers to some countries from sanctions against Iran's oil exports. The waivers are due to expire around the start of May. Iranian Oil Minister Bijan Zanganeh said on Thursday that the U.S. sanctions against his country were "fully illegal" and Tehran would not comply with them.