Oil prices are slightly lower in see-saw trade, easing the day after a strong rally as investors were no longer encouraged by US-China trade talks and as weak Chinese economic data dampened risk appetite.

Brent crude futures fell 23 cents to $US61.21 a barrel.

US West Texas Intermediate crude futures fell 9 cents to $US52.27 a barrel.

Earlier in the session, both benchmarks hit their highest in nearly a month.

WTI hit a session high of $US52.70 per barrel and Brent rose to $US61.91 a barrel.

The previous session, oil prices jumped 5 per cent, capping off an eight-day rally that marked oil’s longest sustained rise since July 2017.

Global financial markets had surged on hope Washington and Beijing would avert an all-out trade war.

Three days of talks between the two biggest economies that concluded on Wednesday.

But the rise in global markets began to dwindle after the two sides issued vaguely positive statements that lacked concrete details.

On Thursday, US President Donald Trump told reporters the countries were having ‘tremendous success’ in their discussions, but offered no other details.

Disappointing data from China added to concerns about the global economy.

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-US 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.

The US stock market, which oil futures have tracked closely, was also mostly flat after a four-day rise.

‘Today’s price movement has been heavily driven by swings in the equities,’ Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

Barclays forecast that Brent will remain range bound at $US55 to $US65 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 per cent on Wednesday, pointing to weakening economic growth expectations and rising oil supply.

US 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 US output, the Organisation of the Petroleum Exporting Countries and its allies, including Russia, reached a deal to rein in supply that officially began in January.

Iranian Oil Minister Bijan Zanganeh said US 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 US sanctions, would receive no exemption and block the agreement.