Brent crude oil prices eased away from 2019 highs on Tuesday on caution that economic growth may dent fuel demand this year, although supply cuts led by producer cartel OPEC still meant markets were relatively tight.
International Brent crude oil futures were at 66.08 dollars per barrel at 02:20 GMT, down 42 cents, or 0.6 per cent from their last close, but still not far off the 2019 high of 66.83 dollars a barrel hit in the previous session.
U.S. West Texas Intermediate (WTI) crude futures were at 55.71 dollars per barrel, while that was up 12 cents from their last settlement, it was below the 56.33 dollars 2019 high from the previous day.
Traders said the slight downward correction was driven by concerns about the
health of the global economy this year.
Bank of America Merrill Lynch said in a note that the Sino-American trade dispute was hurting economic growth globally.
“Addressing global trade tensions is key for improving the economic outlook,” it said in a note.
China’s vice premier and chief trade negotiator, Liu He, and U.S. Trade Representative, Robert Lighthizer, lead a round of trade talks this week in Washington.
Considering the economic outlook and supply and demand balances, the bank said it expects Brent prices to average between 50 dollars and 70 dollars per barrel, “anchored around 60 dollars.”
Despite some caution around trade, global oil markets remain relatively tight because of supply cuts led by the Middle East dominated Organization of the Petroleum Exporting Countries (OPEC), with top crude exporter Saudi Arabia cutting the most.
Saudi seaborne crude exports fell in the first half of February, with departures standing at 6.204 million barrels per day (bpd), a 1.341 million bpd decline on the previous month and 0.91 million bpd decline on the year, data intelligence firm Kpler said.
Further providing oil markets with support are U.S. sanctions against petroleum exporters Iran and Venezuela.
Venezuela is a major crude supplier to U.S. refineries while Iran is a key exporter to major demand centers in Asia, especially China and India.
