* China to set lower GDP growth target in 2019 - sources
* U.S. sanctions cut Iran oil exports for 3rd mth in Jan -sources
* U.S. oil drillers cut rigs for second week in row -Baker Hughes
(Updates with settlement prices, market activity, adds commentary)
By Laila Kearney
NEW YORK, Jan 11 (Reuters) - Oil prices fell nearly 2 percent on
Friday as investors worried about a global economic slowdown, snapping
a nine-day winning streak spurred by U.S.-China trade hopes, but clung
to some gains from that rally to end the week higher.
Brent crude futures dropped $1.2 to settle at $60.48 a barrel,
a 1.95 percent loss. U.S. West Texas Intermediate (WTI) crude futures
were down $1 to settle at $51.59 a barrel, or 1.9 percent.
Still, both benchmarks saw their second week of gains, with Brent
rising about 6 percent and WTI up about 7.6 percent.
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
China plans to set a lower economic growth target of 6-6.5 percent
in 2019 compared with last year's target of "around" 6.5
percent, policy sources told Reuters, as Beijing gears up to cope with
higher U.S. 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 Organization 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
Lower oil exports from Iran since November, when U.S. 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 U.S.
crude production was "significantly above 12 million bpd" by
U.S. 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.
(Additional reporting by Noah Browning in London, Henning Gloystein
in Singapore, Stephanie Kelly and Scott DiSavino in New York; Editing
by Susan Thomas and Marguerita Choy)
((Laila.email@example.com; (917) 809-0054))