FILE PHOTO: An oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo
FILE PHOTO: An oil pump is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann/File Photo

London — Oil markets slipped on Friday and were heading for a weekly loss, pulled down by worries about a global economic slowdown, although Opec-led supply cuts and US sanctions against Venezuela provided crude with some support.

Weighing on financial markets were concerns that a trade dispute between the US and China would remain unresolved, denting global economic prospects.

International Brent crude futures were down 14 US cents at $61.49 per barrel at 8.55am GMT. On the week, they are set for a loss of about 2%, the steepest weekly fall this year.

US West Texas Intermediate crude futures stood at $52.46 per barrel, down 18c, and looking at a 5% weekly slump.

US President Donald Trump said on Thursday that he did not plan to meet Chinese President Xi Jinping before a March 1 deadline set by the two countries to strike a trade deal. If there is no agreement between the world's two biggest economies, Trump has threatened to increase US tariffs on Chinese imports.

On Thursday, the European Commission sharply cut its forecasts for eurozone economic growth due to global trade tension and an array of domestic challenges.

Another factor weighing on oil prices this week was a strong dollar.

Despite this, traders said crude was prevented from falling much further by supply cuts led by Opec, adopted late in 2018 with the aim of tightening the market and propping up prices.

As part of the cuts, Opec kingpin Saudi Arabia reduced its output in January by about 400,000 barrels per day (bpd) to 10.24-million bpd, Opec sources said.

That puts Saudi crude oil production almost 1.7-million bpd below that of the US, which has churned out around 11.9-million bpd in late 2018 and early 2019 — up more than two-million bpd from a year earlier.

Another risk to supply comes from Venezuela after the implementation of US sanctions against the Opec member's petroleum industry in late January. Analysts expect this move to knock out 300,000-500,000 bpd of exports.

For the time being, though, the sanctions impact on international oil markets has been limited.

"The [Venezuela] disruption overall seems manageable both for the US and the global market," said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.

Reuters