US crude futures briefly hit a 2019 high on Friday but retreated along with benchmark Brent oil as worries about the global economy and robust US production put a brake on prices.
West Texas Intermediate (WTI) crude oil futures were down 12 US cents at $US58.49 per barrel, having hit their highest so far this year at $US58.95.
Brent crude futures were at $US66.85 per barrel, down 38 US cents from their last settlement, and below their 2019 peak of $US68.14 reached on Thursday.
US crude was on track to end the week 3.2 per cent higher, and Brent was up 1.7 per cent.
‘The market is taking a pause as it tries to digest mixed reports that give us different ideas of future supply and demand,’ said Phil Flynn, an analyst at Price Futures group in Chicago.
‘The OPEC-plus meeting could give us a little direction,’ he said.
The Organisation 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 US shale output.
OPEC+ ministers will meet on April 17-18 to decide production policy.
‘If OPEC+ decide to extend (cuts) … we expect that inventories will continue to draw through at least Q3,’ US investment bank Jefferies said.
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.
Oil price gains have been limited by concerns that an economic slowdown that has gripped large parts of Asia and Europe will dent growth in fuel demand.
But oil consumption has held up so far.
Crude oil use in China, the world’s biggest importer, in the first two months of 2019 rose 6.1 per cent 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’.