(Bloomberg) -- Oil erased almost an entire week of advances as chart-watching traders tested a key price barrier.
Futures in New York fell 1.2% on Friday, a day after closing at a three-month high. Selling accelerated after a foray above $61 a barrel petered out, a bearish technical signal. The next key threshold is at the $60 level, traders said.
On the fundamental front, U.S.-China trade negotiations slogged on against the backdrop of shrinking American crude inventories. Crude eked out a third consecutive weekly advance with a 0.6% increase.
New York futures are on track for the strongest December performance since 2002 as prospects for a trade truce brightened between the world’s two largest economic powers. An agreement between OPEC and allied producers to deepen supply cuts has also supported prices.
“Brace yourself for $60,” said Robert Yawger, futures director at Mizuho Securities USA LLC in New York. A dip to $60 “would supersize the amount and speed of the exit” by speculators.
West Texas Intermediate crude for February delivery fell 74 cents to settle at $60.44 a barrel on the New York Mercantile Exchange.
Brent for February delivery slid 40 cents to $66.14 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at $5.70 premium to WTI for the same month.
--With assistance from Grant Smith.
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