Crude futures eased off their highs on Thursday as concerns about the strength of the US heating oil and gasoline markets replaced earlier worries about a production cut by the Organisation of the Petroleum Exporting Countries.

A smaller-than-expected drop in US natural gas inventories triggered a drop in the Nymex heating oil futures, which in turn helped pull US crude futures lower.

March Nymex WTI declined 79 cents to $47.54 a barrel in New York trade, having reached a intra-day high of $48.65 earlier in the session. IPE Brent for April delivery also retreated, dropping 33 cents to $45.82 a barrel in London trade, reversing the 76 cents gain from the previous session.

The Energy Information Administration, the statistical arm of the US department of energy, said any Opec output cut would make it difficult for refiners to meet demand in the lead up to the summer driving season. The EIA said in recent days that many Opec ministers have opined they might have to cut oil production quotas at their upcoming meeting on March 16 - with the cuts presumably effective April 1 - because of the seasonal demand weakness in the second quarter. Otherwise, they say they may face falling prices.

The EIA said over the past 10 years, the average spot price for West Texas Intermediate (WTI) crude oil had dropped in the second quarter compared to the first quarter only five times, while the other five years had seen WTI prices increase over the second quarter.

"Clearly then, the notion that crude oil prices will fall dramatically in the second quarter of the year due to a drop in oil product demand is an urban legend, as the demand for crude oil is expected to be especially strong in the second quarter this year," it said.

The EIA estimates world oil product demand will be 1.9m barrels a day higher this second quarter than last year's second quarter.

Gold was $1.60 higher at $427.10/$427.80 a troy ounce in late afternoon London trade, from the late quote of $425.50/$426.20 in New York on Wednesday.

Zinc hit an intra-day high of $1,375 a tonne, its highest levels since October 1997, following another large fall in inventories held in warehouses registered at the London Metal Exchange. Zinc prices have risen by more than $400 since September as China has turned from a net exporter of the metal to a net importer.

The three-month LME aluminium price popped above $1,900 a tonne for the first time since plunging about 10 per cent in late December after reaching a nine-year high of $1,973 a tonne. The copper price continued to threaten to break its 15-year high of $3,175 reached in October, peaking at $3,160 on Thursday.

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