By Christopher Alessi and Dan Molinski 

--U.S. oil prices were lower Wednesday despite gains on Wall Street, as investors geared up for data on U.S. oil inventories that could reinforce worries of an economic slowdown.

--West Texas Intermediate futures, the U.S. oil standard, were down 0.5% at $52.77 a barrel on the New York Mercantile Exchange.

--Brent crude, the global oil benchmark, was up 0.3% at $61.71 a barrel on London's Intercontinental Exchange in morning trade.

HIGHLIGHTS

Global Economy: The bullish sentiment that has bolstered the oil market during the first three weeks of 2019 has largely taken a breather this week, with crude prices falling Tuesday and remaining subdued Wednesday morning.

As government officials and business executives gather at the World Economic Forum in Davos this week, the International Monetary Fund warned of economic risks around the globe.

"We saw both doom and gloom coming out of Davos," said Phil Flynn at Price Futures in Chicago. "Talk of slowdown fears are making the rounds."

Among the concerns being voiced at Davos are the U.S.-China trade dispute, Britain's planned exit from the European Union, and a slowdown in the Chinese economy. The IMF lowered its global economic growth forecast for 2019 to 3.5% from 3.7%.

"The oil market closely follows the growth mood and concerns about stalling U.S.-Chinese trade talks weighed on prices yesterday," said Norbert Ruecker, head of macro and commodity strategy at Julius Baer.

Still, oil prices have risen by around 20% since hitting annual lows in the last week of December, largely moving in tandem with global equities

U.S. Inventories: Investors will next focus on weekly data on U.S. oil inventories that could show crude stockpiles start to bearishly creep higher after trending slightly lower the past two months. That is because analysts point to bulging inventories of gasoline and other fuels that may lead refineries to slow down activity, thus forcing oil producers to store more oil in tanks. Industry group American Petroleum Institute is set to release its inventory data Wednesday afternoon, followed by the official data from the Energy Information Administration on Thursday.

U.S. Production: The Energy Information Administration reported Tuesday it expects U.S. shale production to rise by just 63,000 barrels a day in February, the lowest growth rate in nine months. "The increased price volatility over much of [the fourth quarter of 2018] will have done little to support increased drilling activity. Meanwhile, the number of drilled but uncompleted wells increased by 218 over December to total a record 8,594," said Warren Patterson, head of commodity strategy at ING Bank.

INSIGHT

OPEC+: The oil market has been bolstered since the start of 2019 by the implementation of production cuts by the Organization of the Petroleum Exporting Countries and its allies. OPEC and 10 producers outside the oil cartel, led by Russia, agreed late in 2018 to collectively hold back crude output by 1.2 million barrels a day for the first half of 2019, to rein in a burgeoning supply glut and boost prices.

Overall, the "OPEC+ production deal and healthy oil demand growth should keep the oil market balanced in 2019," UBS Wealth Management analysts said in a note Wednesday. "While trade war fears continue to unsettle financial markets, oil demand growth has remained healthy."

AHEAD

-- API releases weekly data on U.S. oil inventories Wednesday, followed by official data from the EIA on Thursday.

Write to Christopher Alessi at christopher.alessi@wsj.com and Dan Molinski at Dan.Molinski@wsj.com

(END) Dow Jones Newswires

January 23, 2019 10:46 ET (15:46 GMT)

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