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Brent Futures Slide to $68

Brent Futures Slide to $68Brent Futures Slide to $68

Oil prices slid on Friday, putting them on course for the biggest weekly falls since October, as a bounce-back in US production outweighed ongoing declines in crude inventories.

Brent crude futures were at $68.7 a barrel, down 61 cents from their last close. On Monday, they hit their highest since December 2014 at $70.37, CNBC reported.

US West Texas Intermediate crude futures were at $63.38 a barrel, down 57 cents from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.

The International Energy Agency, in its monthly report, said global oil stocks have tightened substantially, aided by OPEC cuts, demand growth and Venezuelan production hitting near 30-year lows.

US crude oil production stood at 9.75 million barrels per day on Jan. 12, data from the Energy Information Administration showed. The IEA said it expects this to soon exceed 10 million bpd, overtaking OPEC behemoth Saudi Arabia and rivaling Russia.

Analysts also pointed to an expected demand slowdown at the end of winter in the northern hemisphere and excessive long positions in financial oil markets as a likely brake on any upward momentum in prices.

ANZ bank said “an upcoming soft patch in demand and extreme investor positioning does open up the possibility of some short-term weakness”.

Overall, however, oil prices remain well supported and most analysts do not expect steep declines.

The main price driver has been a production cut by a group of major oil producers around the Organization of Petroleum Exporting Countries and Russia, who started to withhold output in January last year. The supply cuts by OPEC and its allies, which are scheduled to last throughout 2018, were aimed at tightening the market to prop up prices.

In the United States, crude inventories fell 6.9 million barrels in the week to Jan. 12, to 412.65 million barrels.

That’s their lowest seasonal level in three years and below the five-year average marker around 420 million barrels.

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