(Bloomberg) -- Oil retreated from a five-month high as burgeoning U.S. crude supplies and a cautious view on demand flashed warning signs for traders.

Futures fell as much as 1.6 percent in New York, a day after government data showed American crude inventories swelling to the highest since 2017. The International Energy Agency said that while global supplies are tightening for now, the agency could lower its forecasts because of economic threats.

The Organization of Petroleum Exporting Countries and its allies have propelled crude’s 40 percent surge this year by cutting output, with supply disruptions from Libya to Venezuela adding momentum. Pushing in the other direction have been fears over the global economy and signs that the price rally will unleash a new torrent of American shale oil.

“The energy complex is on the back foot as investors fret over yesterday’s hefty build in US crude stockpiles," analysts at London broker PVM Oil Associates Ltd. said in a note to clients. “Market players are increasingly adopting a wait-and-see approach as uncertainty continues to plague the global economic and trade outlook."

West Texas Intermediate for May delivery fell 86 cents to $63.75 a barrel on the New York Mercantile Exchange at 11:20 a.m. It had reached $64.61 on Wednesday, the highest closing level since Oct. 31.

Brent for June settlement declined 36 cents to $71.37 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude was at a premium of $7.48 to WTI for the same month.

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U.S. crude stockpiles expanded by about 7 million barrels last week, more than double the amount analysts had forecast, the Energy Information Administration said on Wednesday. At 456.6 million barrels, inventories are well above the five-year average. That suggests American output, which held at a record 12.2 million barrels a day last week, may still add to a global glut.

Striking a more bullish tone, the IEA said Thursday that worldwide crude inventories are set to decline for the rest of the year as OPEC output falls. Yet it also said an accumulation of economic risks from Europe to Argentina may ultimately lead the agency to reduce its forecasts for demand.

OPEC itself said this week that global inventories will decline sharply this quarter and next if output remains at current levels. The group’s production -- at 30.022 million barrels a day in March -- is about 758,000 barrels a day below the average amount it believes is needed during the second quarter.

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