* Gulf of Mexico producers cut output ahead of storm
* British tanker incident highlights Middle East tensions
* OPEC sees lower 2020 demand for its oil, points to surplus (New throughout, updates prices, market activity, comments; changes byline, new dateline, previous LONDON)
By Stephanie Kelly
NEW YORK, July 11 (Reuters) - Oil prices eased off early gains on Thursday as OPEC forecast slower demand for its crude next year, but crude futures hovered at near the highest in more than a month as oil rigs in the Gulf of Mexico were evacuated ahead of a storm.
Brent crude futures fell 3 cents to $66.98 a barrel by 11:24 a.m. EDT (1524 GMT). During the session, they hit their highest since May 30 at $67.65 a barrel.
U.S. West Texas Intermediate (WTI) crude futures rose 25 cents to $60.68 a barrel, after hitting their highest since May 23 at $60.94.
Ahead of what could be one of the first major storms of the Atlantic hurricane season, U.S. oil producers have cut nearly a third of their output in the Gulf of Mexico
Phillips 66 said it expected to complete the closing of its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery because of the storm threat.
Tropical Storm Barry formed with heavy rains expected across the north-central U.S. Gulf Coast, the National Hurricane Center said.
“Every storm is different,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “There are still a lot of questions to be answered, whether it’s going to do damage to the supply side or going to do more damage to the demand side.”
Tensions in the Middle East also kept investors on edge. A day after Iran warned Britain would face “consequences” over the seizure of an Iranian oil tanker, three Iranian vessels tried to block passage of a British ship run by BP through the Strait of Hormuz, the British government said. They withdrew after warnings from a British warship.
“What happened was partially expected. We pointed out last week that Iran was likely to do something of the sort,” Petromatrix oil analyst Olivier Jakob said.
The Organization of the Petroleum Exporting Countries gave its first 2020 forecasts in a monthly report on Thursday, saying the world would need 29.27 million barrels per day (bpd) of crude from its 14 members next year, down 1.34 million bpd from this year.
The forecast points to the return of a surplus despite an OPEC-led pact to restrain supplies, and was seen as a drag on prices.
Additional reporting by Julia Payne and Bozorgmehr Sharafedin in London and Aaron Sheldrick in Tokyo; Editing by Dale Hudson, Mark Potter and David Gregorio