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Oil steadies after U.S.-China talk hopes fade
Oil prices steadied on Thursday, following a week-long rally, after U.S.-China 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. West Texas 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 Washington and Beijing 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 China overnight added to concerns about a global economic slowdown.
China`s producer 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 analyst at Price Futures Group in Chicago.
Barclays 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. bank Morgan Stanley cut its 2019 oil price forecasts by more than 10 percent on Wednesday, pointing to weakening economic growth expectations and rising oil supply.
The main source of new supply is the United States, where crude oil production 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 Oil Minister Bijan Zanganeh said U.S. sanctions against his country were "fully illegal" and Tehran 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.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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