Oil prices dip as worries over economic slowdown return

Oil falls nearly 2 percent amid global economy concerns but ends week higher

Oil prices up with OPEC cuts, US-China trade talks

Stocks have rallied this week, helped by promises of patience from the Federal Reserve, the European Central Bank mulling more cheap money, and progress in trade talks between Washington and Beijing.

On Monday, oil prices continued to rise, erasing part of the steep losses in December 2018, as the OPEC-led output cut deal, going into effective this month, has begun to play its role.

"Amid easing trade tension and a weaker US dollar, crude oil prices rallied after Saudi Arabia reassured the market that its production cuts would remain in place", ANZ bank said on Thursday. A statement from the Office of the U.S. Trade Representative said negotiators will "report back to receive guidance on the next steps".

POWELL SPEECH: Federal Reserve Chairman Jerome Powell said Thursday that the US central bank has the "ability to be patient" with its plans to gradually raise interest rates.

"But the trade negotiations between the USA and China still add some uncertainty to global financial and oil markets, possibly leading to corrections in prices in the shorter term".

Australian shares .AXJO were down 0.2 percent, while Japan's Nikkei .N225 eased 1.2 percent. The markets have had their day, they have pushed the Federal Reserve to work towards a sort of concerted patience stance.

The rally has gained traction since last Friday, when Federal Reserve Chairman Jerome Powell said he was aware of risks to the economy and would be patient and flexible in policy decisions this year.

Crude futures sank along with the ebbing energy sector in the 11 primary S&P 500 sectors, which led the laggards with around 0.58 percent fall.

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Crude oil prices were up around 1 percent at the start of trading Wednesday through OPEC curbing oil production and with the ongoing trade talks between the US and China generating investor optimism.

US crude was last trading 0.55 percent lower at $52.03 a barrel.

U.S. West Texas Intermediate (WTI) crude oil futures were at $51.66 per barrel at 0950 GMT, down 70 cents, or 1.3 percent, from their last settlement.

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

Pepperstone's Weston said he viewed further gains in oil prices as a key driver for a further rise in risk appetite.

Gold prices rose on Wednesday, with spot gold XAU= rising 0.49 percent to $1,291.2 per ounce. "That's really good for the cost of money and taking some further headwinds out of the US dollar", he said.

Talks are expected to reconvene later this month but investors remained cautious due to concerns about a global economic slowdown.

CURRENCIES: The euro was up 0.3 percent at $1.1529 while the dollar fell 0.1 percent to 108.27 yen. WTI hit a session high of $52.70 per barrel and Brent rose to $61.91 a barrel.

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