UPDATE 8-Oil pulls back from 2-month highs on China trade worries

* OPEC+ likely to extend supply cuts for three months
-sources
* Market eyes next round of U.S.-China trade talks

(Updates with settlement prices)
By Jessica Resnick-Ault
NEW YORK, Nov 22 (Reuters) - Oil prices fell on Friday,
pulling back from two-month highs as concern over U.S.-China
trade talks overshadowed expectations of an extension to OPEC+
production cuts.
Brent crude futures LCOc1 eased 58 cents to settle at
$63.39 a barrel, having touched a high of $64.27 early in the
session. West Texas Intermediate crude (WTI) CLc1 fell 81
cents to settle at $57.77 a barrel, dropping from its session
high of $58.74.
After paring their gains, both benchmarks ended the week
little changed.
"The U.S.-China situation isn't looking very positive, so
that took some of the steam out of the rally you had this week,"
said John Kilduff, a partner at Again Capital Management in New
York.
Uncertainty over whether the United States and China will be
able to reach a partial trade deal that would lift some pressure
on the global economy kept a lid on prices.
Chinese President Xi Jinping on Friday said China wants to
work out an initial trade pact with the United States and has
been trying to avoid a trade war but is not afraid to retaliate
when necessary. China has invited top U.S. trade negotiators for a new round
of face-to-face talks in Beijing as efforts continue to strike
at least a limited deal, the Wall Street Journal reported on
Thursday, citing unidentified sources.
"The key factor for the demand outlook for oil is the trade
negotiation," said Michael McCarthy, chief market strategist at
CMC Markets and Stockbroking in Sydney.
"With oil near the top of recent trading ranges, it's no
surprise to see a bit of selling pressure."
Prices rallied to their highest since late September on
Thursday after Reuters reported that the Organization of the
Petroleum Exporting Countries (OPEC) and Russia are likely to
extend existing production cuts by three more months to mid-2020
when they meet over Dec. 5-6. The group will also emphasise the need for stricter deal
compliance from the likes of Iraq and Nigeria.
"A disciplined approach from Iraq and Nigeria should shave
off another 300-400,000 barrels per day (bpd) from the group's
production level leading to a balanced market in the first half
of 2020 and to a possible supply deficit in the second half,"
said oil brokerage PVM.
The current agreement is for a production cut of 1.2 million
bpd until the end of March.
News of the biggest drawdown for three months in U.S. crude
stock stockpiles at Cushing, Oklahoma, also underpinned prices
this week. Cushing is the delivery point for WTI futures.
EIA/S