Oil prices hovered just below 2019 highs on Tuesday as traders waited for the outcome of U.S.-China trade talks this week, while supply cuts led by producer group OPEC meant markets were relatively tight.
International Brent crude oil futures were at $66.52 per barrel at 0755 GMT, 5 cents above their last close and not far off the 2019 high of $66.83 a barrel hit in the previous session.
U.S. West Texas Intermediate (WTI) crude futures were at $56.03 per barrel, up 44 cents, or 0.8 percent, from their last settlement and close to the 2019 high of $56.33 touched the previous day.
Traders said they were cautious on taking large new positions before the outcome of the trade talks that start in Washington on Tuesday between senior Chinese and U.S. negotiators.
Bank of America Merrill Lynch said in a note that the Sino-U.S. trade dispute was hurting economic growth globally.
“Addressing global trade tensions is key for improving the economic outlook,” the bank said.
Considering the economic outlook and supply and demand balances, the bank said it expects Brent prices to average between $50 and $70 per barrel, “anchored around $60”.
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 centres in Asia, especially China and India.
