OIL PRICES: ABOVE $68
Brent crude futures were at $68.78 at 0128 GMT, down 53 cents, or 0.8 percent, from their last close. On Monday, they hit their highest since December, 2014 at $70.37 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were at $63.36 a barrel, down 59 cents, or 0.9 percent, from their last settlement. WTI marked a December-2014 peak of $64.89 a barrel on Tuesday.
Traders said the lower prices were prompted by a recovery in U.S. oil production after a recent drop, as well as by an expected fall in demand when winter ends in the northern hemisphere.
U.S. crude oil production stood at 9.75 million barrels per day (bpd) on Jan. 12, data from the Energy Information Administration (EIA) showed.
Output had fallen to 9.49 million barrels at the start of the year, due largely to a cold snap that shut down some production.
Most analysts expect U.S. output to break through 10 million barrels per day soon.
Analysts also pointed to excessive long positions in financial oil markets as a likely brake on any upward momentum in prices, with many traders soon likely to cash in on recent price rises, which saw crude jump by around 14 percent since early December.
"An upcoming soft patch in demand and extreme investors positioning does open up the possibility of some short-term weakness," ANZ bank said.
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 the Petroleum Exporting Countries (OPEC) and Russia, who started to withhold production 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 in order 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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API - American Petroleum Institute reported that the first four months of this year saw U.S. petroleum demand average 750 thousand barrels a day above the same period in 2017 despite higher prices, a sign of solid economic activity. April also saw the U.S. produce a record 10.5 million barrels per day (MBD) of oil.
IMF - “Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports.
BAKER HUGHES A GE - U.S. Rig Count is up 1 rig from last week to 1,046, with oil rigs unchanged at 844, gas rigs up 1 to 200, and miscellaneous rigs unchanged at 2. Canada Rig Count is up 4 rigs from last week to 83, with oil rigs up 6 to 38 and gas rigs down 2 to 45.
REUTERS - Brent crude futures LCOc1 were at $79.57 per barrel at 0310 GMT, up 27 cents, or 0.3 percent from their last close. Brent broke through $80 for the first time since November 2014 on Thursday. U.S. West Texas Intermediate (WTI) crude futures were at $71.62 a barrel, up 13 cents, or 0.2 percent, from their last settlement.