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Oil prices mixed as OPEC renews call for cuts, lowers demand outlook

An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. REUTERS/Ernest Scheyder/Files

By Laila Kearney

NEW YORK (Reuters) - Oil prices were mixed on Thursday after touching four-month highs as OPEC stressed the need to extend its production cut program past June while lowering its forecast for crude demand.

Disappointing economic data out of China and a dip in the U.S. stock market weighed on crude prices.

Brent crude hit a 2019 peak of $68.14 per barrel before falling to $67.33 a barrel by 12:19 p.m. EST (1617 GMT), down 22 cents or 0.3 percent from Wednesday's close.

U.S. West Texas Intermediate crude futures edged up 26 cents to $58.52 a barrel, or 0.5 percent.

Oil rallied on Wednesday on U.S. government data showing a surprise fall in crude inventory and a lower-than-expected estimate of U.S. crude production growth.

"After the big run-up yesterday, the market probably wanted a little bit more reassurance to get it from the next level and it's not getting it," said Phil Flynn, analyst at Price Futures Group in Chicago. "It's not getting it from the stock market, and it's not getting it from the OPEC report, which is a mixed bag."

In its monthly report released on Thursday, the Organization of the Petroleum Exporting Countries cut the forecast for demand for its crude this year and predicted strong growth in non-OPEC supply.

"This highlights the continued shared responsibility of all participating producing countries to avoid a relapse of the imbalance and continue to support oil market stability in 2019," OPEC said.

OPEC made the case in the report for an extension of its crude output cuts, which have helped oil prices rise more than 20 percent this year.

Fresh concerns about the global economy weighed on oil prices.

Bloomberg reported that a meeting between the presidents of the United States and China to resolve a trade dispute had been delayed, briefly sending futures lower.

Data showing China's industrial output grew 5.3 percent in January and February, the slowest pace of expansion in 17 years, also limited gains, Flynn said.

Meanwhile, supply disruptions out of OPEC members Venezuela and Iran helped support oil prices.

Amid political turmoil in Venezuela, two storage tanks exploded at a heavy-crude upgrading project in the east of the country on Wednesday, according to an oil industry source and a legislator.

Two sources told Reuters that the United States aims to curb Iran's crude exports by about 20 percent to below 1 million barrels per day from May, likely reining in waivers for Tehran's remaining customers.

"With OPEC's cuts in full swing ... persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported," said Jasper Lawler, head of research at futures brokerage London Capital Group.

(Additional reporting by Noah Browning and Henning Gloystein; Editing by Kirsten Donovan and James Dalgleish)