Prime News: Oil Slides but Continues to be Near Multi-Year Highs on Supply Cuts, Solid Demand

Oil prices edged down on Friday but continued to hover near three-year highs hit earlier this week, with ongoing OPEC-led supply cuts and solid demand gradually siphoning excess supplies.

Brent crude oil futures stood at $73.62 per barrel, falling 16 cents or 0.2 percent from their last settlement.

U.S. WTI crude futures traded down 20 cents or 0.3 percent at $68.09 per barrel.

Both crude contracts hit their highest levels since November 2014 in the prior session, with Brent at $74.75 and WTI at $69.56 per barrel respectively. WTI is positioned for its second weekly increase, rising over 1 percent this week, while the Brent is also set to increase for a second week, gaining around 1.5 percent.

According to traders, the Friday’s declines were the results of investors lockin in their profits after Thursday’s multi-year highs. Oil prices have been lifted by a gradually tightening market.

OPEC, along with other producers, has been limiting production since 2017 to reduce a global supply glut that had weighed down crude prices between 2014 and 2016.

U.S. investment bank Jefferies said commercial inventories in the OECD are now basically at their five-year average and drawdowns will possible speed up as refiners restart operations from maintenance before the peak seasonal demand. It added that OECD commercial inventories could retreat back to a level not observed since the oil prices’ downward trajectory started in 3Q14. It said that on a day of forward basis, cover could decline below 57 days later this year, a level last seen in 2011.

The material has been provided by InstaForex Company – www.instaforex.com

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