Crude futures edged down slightly from multiyear highs Wednesday ahead of the release of data on global crude production.
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Light, sweet crude for February delivery lost 10 cents, or 0.2%, to $63.63 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, recently traded flat, at $69.15 a barrel.
Oil prices have risen to highs last seen in 2014, on the back of geopolitical turmoil in key producing regions and efforts by the Organization of the Petroleum Exporting Countries and some producers outside the cartel to reduce output. The global supply glut has weighed on prices for over three years.
OPEC and its allies including Russia agreed in November to further extend the production cuts negotiated in 2016 for up to the end of 2018, with a review period in late June. The deal had been set to expire in March.
Analysts warn that Brent may have trouble sustaining a move above $70 a barrel as investors who are betting on even higher prices clash with producers bracing for lower prices.
"You still have some speculators that are aiming for prices going higher but you will also find the resistance from some producers that are hedging," said Olivier Jakob, managing director of Petromatrix, an oil research firm in Switzerland.
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Analysts are warning that OPEC shouldn't declare its mission accomplished too early and abandon its production cuts, as higher crude prices may stimulate increased shale oil production.
The Energy Information Administration has projected that U.S. oil production may reach 10 million barrels a day in February.
"Thus OPEC has no scope for expanding production," said Commerzbank analysts in a recent note. "It is therefore too early for OPEC to decide on any premature (gradual) exit from the production cuts, even though rumors claim that this is already being discussed."
Investors are looking forward to data that will show the state of the oil market and the impact of high oil prices on global consumption. Some analysts warn that consumers might reduce their intake in response to elevated prices.
The U.S. releases official data on its output and OPEC will publish its monthly oil market report Thursday, while the International Energy Agency will release its closely watched oil market report Friday.
"The focus has been on how higher prices will affect production but there has not been a lot of focus on what the higher prices will do to demand," said Mr. Jakob from Petromatrix. "I would start to be a bit more conservative about consumption."
Gasoline futures rose 1.1%, to $1.8587 a gallon, and diesel futures rose 0.3%, to $2.0702 a gallon.
--Stephanie Yang contributed to this article.
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(END) Dow Jones Newswires
January 17, 2018 10:48 ET (15:48 GMT)