Oil steadies on dim OPEC demand outlook, pares gains from Gulf of Mexico storm

NEW YORK (Reuters) – Oil prices steadied on Thursday as OPEC forecast slower demand for its crude next year, with crude futures easing from their highest in more than a month after U.S. producers cut nearly a third of their output in the Gulf of Mexico ahead of what could be one of the first major storms of the Atlantic hurricane.

Brent crude futures fell 23 cents to $66.78 a barrel by 12:59 p.m. EDT (1659 GMT). During the session, they hit their highest since May 30 at $67.65 a barrel.

U.S. West Texas Intermediate (WTI) crude futures rose 4 cents to $60.47 a barrel, after hitting their highest since May 23 at $60.94.

At least 17 offshore oil and gas platforms were evacuated in the Gulf of Mexico, according to a U.S. regulator as oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday.

Phillips 66 said it expected to complete the closing of its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery because of the storm threat.

Tropical Storm Barry formed with heavy rains expected across the north-central U.S. Gulf Coast, the National Hurricane Center said.

“Every storm is different,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “There are still a lot of questions to be answered, whether it’s going to do damage to the supply side or going to do more damage to the demand side.”

The Organization of the Petroleum Exporting Countries gave its first 2020 forecasts in a monthly report on Thursday, saying the world would need 29.27 million barrels per day (bpd) of crude from its 14 members next year, down 1.34 million bpd from this year.

The forecast points to the return of a surplus despite an OPEC-led pact to restrain supplies, and was seen as a drag on prices.

Tensions in the Middle East also kept investors on edge. A day after Iran warned Britain would face “consequences” over the seizure of an Iranian oil tanker, three Iranian vessels tried to block passage of a British ship run by BP through the Strait of Hormuz, the British government said. They withdrew after warnings from a British warship.

“What happened was partially expected. We pointed out last week that Iran was likely to do something of the sort,” Petromatrix oil analyst Olivier Jakob said.