An oil well is seen near Denver, Colorado. Picture: Reuters
An oil well is seen near Denver, Colorado. Picture: Reuters

London — Brent crude oil eased on Monday, but remained on track for its strongest first quarter in eight years, thanks to a growing belief among investors that Opec’s supply cuts will prevent a build-up in unused fuel.

Brent futures were down 17c at $66.08 a barrel by 10.18am GMT, having touched a 2019 high of $66.83, while US futures were up 30c at $55.89 a barrel.

Oil has risen nearly 25% so far in 2019 and is on course for its strongest first-quarter performance since 2011, thanks largely to a commitment by the Opec and allies to cut output.

“Our numbers ... do tell us that we are looking at the tightest H1 crude balance in many years and, as such, a certain degree of price support does simply make sense for the time being,” consultancy JBC Energy said in a note.

Refiners around the world are also having to pay more to secure supplies of the medium, or heavy, sour crudes produced by Iran and Venezuela, both of which are under US sanctions.

The broader financial markets eased a little, after data showing a drop in Chinese car sales in January raised concerns about the world’s second-largest economy.

Some of this weakness rubbed off on the oil market, but analysts said the overall trend in crude prices remained convincingly upwards for now.

“There are lots of ‘ifs’ and ‘buts’ that could have a profound impact on oil prices; just think of the unpredictable Donald Trump, Brexit, trade talks or an eventual pick-up in Libyan and/or Venezuelan production,” PVM Oil Associates analyst Tamas Varga said.

“Latest available data, however, point in the direction of a tightening market. It is not recommended to swim against the current and presently the ‘oil’ river is flowing north.”

US energy firms last week increased the number of oil rigs looking for new supply by three, to a total of 857, energy services firm Baker Hughes said in a report last Friday.