Oil prices slid on Friday, putting them on course for the biggest weekly falls since October, as a bounce-back in U.S. production outweighed ongoing declines in crude inventories.Brent crude futures LCOc1 were at $68.70 a barrel at 0949 GMT, down 61 cents from their last close. On Monday, they hit their highest since December 2014 at $70.37. U.S. West Texas Intermediate (WTI) crude futures CLc1 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 (IEA), in its monthly report, said that global oil stocks have tightened substantially, aided by OPEC cuts, demand growth and Venezuelan production hitting near 30-year lows. But it warned that rapidly increasing production in the United States could threaten market balancing.
“Explosive growth in the U.S. and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico,” the IEA said of 2018 production. U.S. crude oil production C-OUT-T-EIA stood at 9.75 million barrels per day (bpd) 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”.