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

Singapore — 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 a barrel at 2.20am GMT, down 42c, or 0.6% from their last close, but still not far off the 2019 high of $66.83 a barrel hit in the previous session.

US West Texas Intermediate (WTI) crude futures were at $55.71 a barrel. While that was up 12c from their last settlement, it was below the $56.33 2019 high from the previous day.

Traders said the slight downward correction was driven by concerns about the health of the global economy in 2019.

Bank of America Merrill Lynch said in a note that the China-US 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 US trade representative Robert Lighthizer led 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 and $70 a barrel, “anchored around $60”.

Despite some caution around trade, global oil markets remain relatively tight because of supply cuts led by the Middle East dominated 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 a day, a 1.341-million barrels a day decline on the previous month and 0.91-million barrel a day decline on the year, data intelligence firm Kpler said.

Further providing oil markets with support are US sanctions against petroleum exporters Iran and Venezuela.

Venezuela is a major crude supplier to US refineries while Iran is a key exporter to major demand centres in Asia, especially China and India.