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Oil stabilises on China-US trade talks, OPEC cuts

Oil prices steadied on Friday after China said it would hold talks with Washington on Jan. 7-8 aimed at solving trade disputes between the two world’s biggest economies.

Crude prices had previously fallen after the United States followed most other major economies into a manufacturing downturn.

U.S. West Texas Intermediate (WTI) crude oil futures were at $47.15 per barrel at 0345 GMT, 6 cents, or 0.1 percent above their last settlement.

International Brent crude futures were close to their last close, at $55.93 a barrel.

Both crude benchmarks were down earlier in the session on concerns that the Sino-American trade war would lead to a global economic slowdown.

Traders said the firmer prices came after China’s commerce ministry said on Friday that it would hold vice ministerial level trade talks with U.S. counterparts in Beijing on Jan. 7-8, as the two sides look to end a dispute that is inflicting increasing pain on both economies and roiling global financial markets.

The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollars worth of goods and stoking fears of a global economic slowdown.

Data for December from the Institute for Supply Management (ISM) on Thursday showed the broadest U.S. slowdown in growth for more than a decade, as the trade conflict with China, falling equity prices and increasing uncertainty started to take a toll on the world’s biggest economy.

Leading economies in Asia and Europe have already reported a fall in manufacturing activity.

“Led by a sharp fall in the U.S. ISM and China’s PMI falling below 50, the global manufacturing PMI fell to 51.5 in December (52.8 previously), a 27-month low,” Morgan Stanley said in a note following the release of the ISM data.

“The recent run of incoming data, coupled with global tightening financial conditions, has increased the downside risks to an already moderating global growth outlook,” the U.S. bank said.

Source: CNBC

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