Oil eases from 2019 highs ahead of US inventory data

NEW YORK: Oil prices eased off 2019 highs on Thursday ahead of U.S. government data that was expected to show a fifth weekly build in crude inventories, while concerns about slowing global economic growth weighed.

Losses were capped by OPEC-led supply cuts and U.S. sanctions on Venezuela and Iran.

U.S. West Texas Intermediate (WTI) crude oil futures fell 17 cents to $56.99 a barrel by 10:26 a.m. EST (1526 GMT) after touching a 2019 high of $57.55 the previous day.

Brent crude futures rose 1 cent to $67.09 after touching a 2019 peak on Wednesday at $67.38.

U.S. crude stocks were forecast to rise 3.1 million barrels. Industry data released late Wednesday showed a 1.3 million-barrel build. Official oil inventory and production data is due at 11 a.m. EST (1600 GMT).

Oil prices have been driven up this year after the Organization of the Petroleum Exporting Countries and producer allies such as Russia, known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) to prevent a supply overhang from growing.

OPEC member Nigeria signalled on Wednesday that it would limit output after its production climbed in January.

"Willingness of the OPEC+ group to adhere with the output cut agreement will remain supportive of oil prices in the run-up to their scheduled April meeting," said Abhishek Kumar, senior energy analyst at Interfax Energy in London.

"Sharply declining oil output from Iran and Venezuela will further prompt bullish sentiment in the market."

U.S. sanctions have hit Iranian and Venezuelan crude exports  while unrest has curbed Libyan output.

However, analysts said that a global economic slowdown - signs of which emerged late last year - was preventing prices from surging beyond highs reached this week.

"Slowing economic growth will invariably lead to weakness in fuel consumption, thus eroding bullish gains for oil prices," said Benjamin Lu of brokerage Phillip Futures in Singapore.

However, talks between the United States and China to resolve a trade dispute which has helped to dent global growth may be progressing. The two sides have started to outline commitments in principle on key points of contention, sources familiar with the negotiations told Reuters.