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Oil prices turn lower, but data buoys hopes of resurgent demand in the US

LONDON--Oil prices turned lower in pre-holiday trading Monday, but retained support from U.S. economic data that has raised hopes of resurgent demand in the world's top crude consumer, analysts said.

New York's main contract, West Texas Intermediate for delivery in February, fell 36 cents to US$98.96 a barrel.

Brent North Sea crude for February slipped 27 cents to US$111.50 a barrel.

Desmond Chua, analyst at CMC Markets, said prices were winning support from robust U.S. growth data, which was “way better than expected.”

The U.S. Commerce Department on Friday reported that economic growth accelerated to an annual rate of 4.1 percent in the third quarter, instead of the previously estimated 3.6-percent pace. Analysts had expected the revision to confirm the 3.6 percent number.

That saw crude futures rise strongly before the onset of profit-taking.

The upbeat data followed the Federal Reserve's announcement that it would cut its stimulus by US$10 billion to US$75 billion a month from January, indicating it is confident that economic conditions are improving.

Analysts continue to keep a close watch on potential supply disruptions in Africa.

Production in fledgling producer South Sudan has been hit by the escalation of internal strife in the country over the past week, with oil companies flying out their employees after the death of at least five South Sudanese oil workers last Wednesday.

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