US oil manages to settle higher after brief dip

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US crude settled below $80 a barrel on Friday after China cut interest rates and on speculation OPEC could agree to reduce oil production.

U.S. crude's front-month contract settled 66 cents higher, or 0.9 percent, at $76.51, after briefly turning lower earlier.

The front-month contract for benchmark Brent crude was up by nearly $1 at $80 a barrel, after having risen $2.28 earlier to a session high of $81.61.

China's central bank cut its benchmark interest rates for the first time in more than two years to reduce borrowing costs and support an economy on track for its slowest annual growth in 24 years.

China is the largest net importer of petroleum and metals, and the rate cut sent most commodity prices surging.

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China cuts rates, Draghi ready to act
China cuts rates, Draghi ready to act

Expectations of an output cut from the Organization of the Petroleum Exporting Countries at its Nov. 27 meeting initially added to the rally.

But profit-takers emerged later, along with those selling to push the market down on bets that oil prices will tumble again next week.

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"We continue to see a bear market for crude, and we've used any opportunity at all in the market's strength to sell into it, in any small way we could," said Tariq Zahir, managing member of Tyche Capital Advisors in Laurel Hollow, New York.

"We don't think OPEC will do much to their production; even if they do cut to support prices a little, they've never been strict with their export quotas before."

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Market bets on the outcome of the OPEC meeting vary, although traders and analysts have been more optimistic in recent days that OPEC will try to stop a near 30 percent price drop since June caused by oversupply worries.

"This market has been sold out so much that any kind of fresh bullish news is going to cause a price pop," said Thomas Saal, analyst at INTL FC Stone in Miami, Florida.

OPEC heavyweight Saudi Arabia has not committed to a cut. But Russia said on Friday Riyadh had expressed "a willingness to cooperate on issues related to energy and oil markets.".

Venezuela has also said it will curb its own output if OPEC agreed to do so.