Oil prices have fallen nearly two per cent as investors worried about a global economic slowdown, snapping a nine-day winning streak spurred by US-China trade hopes, but clung to some gains from that rally to end the week higher.

Brent crude futures dropped $US1.20 to settle at $US60.48 a barrel on Friday, a 1.95 per cent loss. US West Texas Intermediate (WTI) crude futures were down $US1 to settle at $US51.59 a barrel, or 1.9 per cent.

Still, both benchmarks saw their second week of gains, with Brent rising about six per cent and WTI up about 7.6 per cent.

The global crude benchmark on Thursday posted its first consecutive nine-day rally since September 2007. WTI, which also hit its ninth straight day of gains, beat a 2010 record.

Rising expectations that an all-out trade war between Washington and Beijing might be averted supported markets earlier in the week. Three days of talks between the two economic superpowers concluded on Wednesday with no concrete announcements, but higher-level discussions may convene later this month.

“After a number of days higher, the market is just taking a breather,” said Tony Headrick, an energy market analyst at St Paul, Minnesota commodity brokerage CHS Hedging LLC.

Market participants remained cautious about a slew of recent economic data that has raised concerns about a global economic slowdown.

China plans to set a lower economic growth target of 6-6.5 per cent in 2019 compared with last year’s target of “around” 6.5 per cent, policy sources told Reuters, as Beijing gears up to cope with higher US tariffs and weakening domestic demand.

“If we experience an economic slowdown, crude will underperform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

On the supply side, oil markets have received support from supply cuts by the Organisation of the Petroleum Exporting Countries and non-OPEC members including Russia. The deal is aimed at shrinking a glut that emerged in the second half of 2018.

Russia has reduced its oil production to 11.38 million barrels per day (bpd) on average on Jan. 1-10 from a record high of 11.45 million bpd last month, a source familiar with the data told Reuters on Friday.

Lower oil exports from Iran since November, when US resumed sanctions against the OPEC producer, have also supported crude.

Playing a key part in the emerging glut was the United States, where crude oil production has soared to a record 11.7 million barrels per day.

Consultancy JBC Energy this week said it was likely that US crude production was “significantly above 12 million bpd” by this month.

US energy firms, however, this week cut four oil rigs, the second week of declines, General Electric Co’s Baker Hughes energy services firm said, as producers turned conservative in their 2019 drilling plans due to uncertainty over a recovery in crude prices.