SINGAPORE (Reuters) – Oil prices edged up on Tuesday amid OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, although surging U.S. production and concerns over economic growth kept markets in check.

U.S. West Texas Intermediate (WTI) crude oil futures were at $52.60 per barrel at 0043 GMT, up 19 cents, or 0.4 percent, from their last close.

International Brent crude futures had yet to trade.

Analysts warn that markets are tightening amid voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and because of U.S. sanctions on Venezuela and Iran.

But some said that supply-side risks were not receiving enough focus.

“We believe that oil is not pricing in supply side risks lately as markets are currently focused on U.S.-China trade talks, ignoring the risks currently in place from the loss of Venezuelan barrels,” U.S. bank J.P. Morgan said in a weekly note.

Should U.S.-China talks to end trade disputes between the two nations have a positive outcome, the bank said oil markets would “switch attention from macro concerns impacting future demand growth to physical tightness and geopolitical risks impacting immediate supply”.

But surging U.S. supply and a potential economic slowdown this year could cap oil markets.

“The worries of oversupply stemming from the U.S. will likely remain a dominant theme as we approach the warmer months,” said Edward Moya, market analyst at futures brokerage OANDA.

U.S. bank Morgan Stanley said the surge in U.S. crude oil production, which tends to be light in quality and which rose by more than 2 million barrels per day (bpd) last year to a record 11.9 million bpd, had resulted in overproduction of gasoline.

“Light crudes naturally yield more gasoline, and together with relatively modest demand-growth, this has driven gasoline stocks sharply higher and crack spreads sharply lower in recent months,” Morgan Stanley said.

Refining profits for gasoline have plunged since mid-2018, going negative in Asia and Europe, amid tepid demand growth and a surge in supply.

As a result, Morgan Stanley said “low refining margins and weaker economic data means oil prices can rally only so much (and) we continue to see modest upside for Brent to $65 per barrel in the second-half (of 2019)”.

(For a graphic on U.S. oil production & drilling levels, click here tmsnrt.rs/2Tm4u4I)