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Oil Prices Fall Sharply On Rising Tensions, Looming OPEC Meeting

After moving modestly higher in the two previous sessions, the price of crude oil showed a substantial pullback during trading on Friday.

Crude for January delivery plunged $2.94 or 5.1 percent to $55.17 a barrel, ending the session at its lowest closing level in a month.

The sell-off by oil prices came amid concerns rising tensions between the U.S. and China over the situation in Hong Kong could impact ongoing trade talks.

The resignation of Iraqi Prime Minister Adel Abdul-Mahdi also contributed to the steep drop, as traders believe the news could help quell weeks of unrest in Iraq.

Traders were also looking ahead to next week's OPEC meeting, where the cartel and its allies are widely expected to extend the current output cut of 1.2 million barrels per day.

After President Donald Trump signed two bills in support of pro-democracy protesters in Hong Kong, a spokesman for China's Foreign Ministry threatened strong countermeasures.

Foreign Ministry spokesman Geng Shuang accused the U.S. of interfering in China's internal affairs and violating international law and the basic norms governing international relations.

"China will take strong counter-measures in response to the U.S. behavior that interferes in China's internal affairs and undermines China's interests," Geng said.

"No one shall underestimate China's determination in safeguarding national sovereignty, security and development interests," he added. "Nor shall they misjudge China's resolve in implementing the 'one country, two systems' principle and in upholding prosperity and stability in Hong Kong."

With a fresh round of protests expected over the weekend, the dispute over the situation in Hong Kong could potentially derail the long-awaited phase one trade deal.

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