LONDON (Reuters) – U.S. crude futures briefly hit a 2019 high on Friday but later retreated along with benchmark Brent oil as worries about the global economy and robust U.S. production put a brake on prices.
West Texas Intermediate (WTI) crude oil futures were down 3 cents at $58.58 per barrel at 1100 GMT, having hit their highest so far this year at $58.95.
Brent crude futures were at $66.92 per barrel, down 31 cents from their last settlement, and more than $1 off their 2019 peak of $68.14 reached on Thursday.
“The market is still torn between economic concerns and high U.S. oil production on one hand and remarkable OPEC+ compliance on the other. The latter is greatly aided by unplanned cuts in production,” PVM oil broker Stephen Brennock said.
The Organization of the Petroleum Exporting Countries and its allies including Russia, an alliance known as OPEC+, agreed last year to cut production, partly in response to increased U.S. shale production.
OPEC+ ministers will meet on April 17-18 to decide output policy.
“If OPEC+ decide to extend (cuts) … we expect that inventories will continue to draw through at least Q3,” U.S. investment bank Jefferies said on Friday.
The International Energy Agency said on Friday that the market could show a modest surplus in the first quarter of 2019 before flipping into a deficit in the second quarter by about 0.5 million barrels per day (bpd).
It said a comfortable supply cushion by OPEC could prevent any price rally in case of possible disruptions and that non-OPEC oil output growth led by the United States should ensure demand is met.
Preventing oil from rising further have been concerns that an economic slowdown that has gripped large parts of Asia and Europe will dent growth in fuel demand.
But oil demand has held up well so far.
Crude oil use in China, the world’s biggest importer, in the first two months of 2019 rose 6.1 percent from a year earlier to a record 12.68 million bpd, official data showed this week.
Goldman Sachs said growth in global demand for crude in January was “nearly 2.0 million barrels per day, with strength visible in both emerging markets and developed economies”.
(GRAPHIC: Global oil supply & demand – tmsnrt.rs/2O4NEW5)
Reporting by Noah Browning in London; Additional reporting by Henning Gloystein; Editing by Dale Hudson