* 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  LCOc1  dropped $1.2 to settle at $60.48
a barrel, a 1.95 percent loss. U.S. West Texas Intermediate
(WTI) crude futures  CLc1  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.  urn:newsml:reuters.com:*:nW1N1XO023
    "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
slowdown. 
    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.
 urn:newsml:reuters.com:*:nL3N1ZA2NV urn:newsml:reuters.com:*:nZZN2RHH00  
    "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.  urn:newsml:reuters.com:*:nL8N1Z95AF
    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 Friday.  urn:newsml:reuters.com:*:nL8N1ZB1A1
    Lower oil exports from Iran since November, when U.S.
resumed sanctions against the OPEC producer, have also supported
crude.  urn:newsml:reuters.com:*:nL8N1Z9370  urn:newsml:reuters.com:*:nL3N1ZB3FO
    Playing a key part in the emerging glut was the United
States, where crude oil production  C-OUT-T-EIA  has soared to a
record 11.7 million barrels per day.  urn:newsml:reuters.com:*:nL1N1Z90XH
    Consultancy JBC Energy this week said it was likely that
U.S. crude production was "significantly above 12 million bpd"
by this month.
    U.S. energy firms, however, this week cut four oil rigs, the
second week of declines, General Electric Co's  GE.N  Baker
Hughes energy services firm said, as producers turned
conservative in their 2019 drilling plans due to uncertainty
over a recovery in crude prices.  RIG-OL-USA-BHI   RIG/U 

 (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.kearney@thomsonreuters.com; (917) 809-0054))