Oil dipped on Wednesday, retreating from a four-month high as economic growth concerns dampened the outlook for fuel consumption.
However, analysts said oil was still well supported by voluntary supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela.
International Brent crude oil futures were at $67.50 a barrel at 0222 GMT, down 11 cents, or 0.2 percent, from their last close. Brent touched $68.20 a barrel on Tuesday, its highest since Nov. 16.
U.S. West Texas Intermediate (WTI) crude futures were at $58.83 per barrel, down 20 cents, or 0.3 percent, from their last settlement. WTI hit a high of $59.57 a barrel on Tuesday, the highest since Nov. 12.
Analysts said the dip was mostly down to concerns that an economic slowdown could soon dent fuel consumption.
“Global growth concerns and ongoing oversupply fears (are) creating headwinds for the commodity,” said Lukman Otunuga, analyst at futures brokerage FXTM.
The dips come after crude prices rose by more than a quarter this year, pushed up by a pledge led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold around 1.2 million barrels per day (bpd) of supply as well as by U.S. sanctions against oil exporters Iran and Venezuela.
“The shaky supply outlook with regard to Venezuela and Iran, as well as the petro-nations’ output restrictions are top of mind in the oil market,” said Norbert Ruecker, head of economics at Swiss bank Julius Baer.
Ruecker said oil prices were likely capped around $70 per barrel as fuel price inflation, as seen last year, would hit demand at that level.
At the same time, he said oil prices were supported above $50 per barrel as investment into U.S. shale output growth would cease below that price.
Between those price levels, Ruecker said “the U.S. shale boom almost fully meets global oil demand growth mirrored by the strongly expanding crude oil exports,” which hit a record 3.6 million bpd in February.
“We see … roughly 1.2 million bpd of U.S. shale oil growth over the coming year,” Ruecker said, which is in line with most global oil demand growth forecasts of 1 million to 1.3 million barrels per day for 2019.
The U.S. Energy Information Administration (EIA) is due to publish its weekly crude production and storage level report around 1700 GMT on Wednesday.