LONDON: Oil prices fell on Friday after China reported slower economic growth, pointing to lower fuel demand in the world's biggest oil importer, although market sentiment was supported by supply cuts agreed last week by major crude producers.
Brent crude was down 55 cents at $60.90 per barrel by 1139 GMT, on course for a decline this week of around 1 percent. US light crude was 35 cents lower at $52.23.
"The energy complex is on the back foot this morning as a batch of soft Chinese economic data triggers a flurry of pre-weekend profit-taking," PVM Oil analyst Stephen Brennock said.
"This pullback provides a timely reminder that current levels of upside potential are meek at best."
China, the world's No.2 economy, on Friday reported some of its slowest growth in retail sales and industrial output in years, highlighting the risks of its trade dispute with the United States.
Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, though runs were 2.9 percent above year-ago levels.
Concerned by mounting oversupply, the Organization of the Petroleum Exporting Countries and other oil producers including Russia agreed last week to reduce output by 1.2 million barrels per day (bpd), or more than 1 percent of global demand.
"For the time being until the OPEC cuts start kicking in, the market is oversupplied in the short term," said Tony Nunan, oil risk manager at Mitsubishi Corp. "If China is slowing down, that's definitely a concern."
The International Energy Agency said on Thursday it expected a deficit in oil supply by the second quarter of next year, provided OPEC members and other key producers stuck closely to last week's deal to cut output.
"The OPEC cuts will have a substantial impact on 1Q19 balances compared with this quarter, but market observers may need to wait for the cuts to percolate to inventory data," Barclays analyst Michael Cohen said in a note.
As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2 million bpd in January.
The IEA kept its 2019 forecast for global oil demand growth at 1.4 million bpd, unchanged from its projection last month, and said it expected growth of 1.3 million bpd this year.
"Our market balance looks 0.5 million bpd tighter next year on reduced OPEC supply, such that the surplus is just 0.2 million bpd," Cohen said.
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