Oil prices have dropped after Chinese economic data indicated slower economic growth, but prices were supported by supply cuts announced by the OPEC-led producers last week.

Brent crude futures slipped 40 cents to reach $61.05 a barrel, while US light crude went down 25 cents to trade at $52.33, reported Reuters.

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Data released by the Chinese Government showed some of its slowest growth in retail sales and industrial output in years.

Beijing is involved in a trade dispute with Washington. The parties signed a truce pact to resolve their trade differences.

The slowing growth points to lower fuel demand in China, the world’s biggest oil importer.

“The OPEC cuts will have a substantial impact on Q1 2019 balances compared with this quarter, but market observers may need to wait for the cuts to percolate to inventory data.”

China also reported a decline in oil refinery throughput last month compared to the levels achieved in October, indicating a dip in oil demand. However, runs were 2.9% above levels recorded a year ago.

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A further price decrease was prevented by the production cuts of 1.2 million barrels per day (Mbpd) agreed by the producer club OPEC and other oil producers, including Russia, in Vienna.

Mitsubishi oil risk manager Tony Nunan was quoted by the news agency as saying: “For the time being until the OPEC cuts start kicking in, the market is oversupplied in the short term. If China is slowing down, that’s definitely a concern.”

Meanwhile, the International Energy Agency predicted an oil supply deficit by the second quarter of 2019, provided the OPEC and other producers comply with their supply cut agreement.

The agency’s 2019 forecast for global oil demand growth remains unchanged at 1.4Mbpd.

Barclays analyst Michael Cohen said: “The OPEC cuts will have a substantial impact on Q1 2019 balances compared with this quarter, but market observers may need to wait for the cuts to percolate to inventory data.”