OIL PRICE: NOT ABOVE $74
REUTERS - Oil prices held firm on Friday near three-year highs reached earlier this week as ongoing OPEC-led supply cuts as well as strong demand gradually draw down excess supplies.
Brent crude oil futures LCOc1 were at $73.79 per barrel at 0440 GMT, up 1 cent from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 down 2 cents at $68.40 a barrel.
Both Brent and WTI hit their highest levels since November 2014 on Thursday, at $74.75 and $69.56 per barrel respectively. WTI is set for its second weekly gain, gaining 1.3 percent this week, while Brent is also poised to rise for a second week, adding 1.6 percent this week.
Oil prices have been pushed up by a gradually tightening market.
Led by top exporter Saudi Arabia, the Organization of the Petroleum Exporting Countries (OPEC), has been withholding production since 2017 to draw down a global supply overhang that had depressed crude prices between 2014 and 2016.
"Commercial inventories in the OECD are now essentially at their 5-year average, and drawdowns likely accelerate as refineries emerge from maintenance ahead of peak seasonal demand," U.S. investment bank Jefferies said on Friday.
"OECD commercial inventories could fall back to... a level not seen since the oil price collapse that began in 3Q14. On a days of forward demand basis, we believe cover could drop below 57 days later this year, a level last seen in 2011," it added.
The tighter oil market is feeding into refined products.
"Signs of tightness are emerging in product markets as stocks saw the largest week-on-week draw since October, 2016 ... The U.S. led the draws but was also aided by draws in Singapore," said U.S. bank Morgan Stanley.
This tightness is also a result of healthy oil demand.
"Global oil demand data so far in 2018 has come in line with our optimistic expectations, with 1Q18 likely to post the strongest year-on-year growth since 4Q10 at 2.55 million barrels per day," U.S. bank Goldman Sachs said in a note published late on Thursday.
Beyond OPEC's supply management, crude prices have also been supported by an expectation that the United States will re-introduce sanctions on OPEC-member Iran.
"The first key geopolitical issue is the expiration of the current U.S. waiver of key sanctions against Iran," said Standard Chartered Bank in a note this week, referring to a deadline on May 12 when U.S. President Donald Trump will decide whether or not to re-impose sanctions.
One factor that could start weighing on prices is rising U.S. production C-OUT-T-EIA, which has jumped by a quarter since the middle of 2016 to 10.54 million barrels per day (bpd), making the United States the world's second-biggest producer of crude oil behind only Russia, which pumps almost 11 million bpd.
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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.