Oil prices fell Friday as some investors cashed in on the week's strong gains and others mulled ambiguous U.S. inventory data.
U.S. crude futures fell 57 cents, or 0.92%, to $61.44 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 45 cents, or 0.66%, to $67.62 a barrel on ICE Futures Europe.
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Prices had closed at a fresh three-year high Thursday, on the back of declining U.S. crude stockpiles and perceived geopolitical risk to supply because of antigovernment protests in Iran. Both benchmarks ended the week higher for a third week in a row, with West Texas Intermediate up 1.69% and Brent up 1.12%.
But the higher prices have also spurred more concern about rising production in places like the U.S., where companies have been locking in the higher prices for this year's output.
"I think it's just gotten overbought and a bit tired," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates. "There's a lot of talk of more and more production, more and more hedging," he said.
The decline Friday was "more related to profit-taking after a good week, " said Giovanni Staunovo, a commodity analyst at UBS Wealth Management.
Mr. Staunovo said the market was likely also reconsidering petroleum-stocks data released yesterday by the U.S. Energy Information Administration. The agency reported a 7.4 million decline in crude barrels for the week ended Dec. 29, but said gasoline inventories rose by 4.8 million barrels and distillate stocks climbed by 8.9 million barrels, as refineries increased utilization rates.
"It's just moving crude from one barrel to another one," Mr. Staunovo said.
Analysts at TAC Energy said oil's move lower "looks like a natural correction of the ongoing bull market." Still, they said relatively steady gasoline and diesel prices, despite the big builds in stockpiles, are a sign that "bulls are firmly in control of the petroleum complex for now."
The increase in distillate inventories was the highest single weekly build over the past year, according to consultancy JBC Energy.
Gasoline stocks fell mainly as a result of sharp fall in demand, as a "seasonal lull in demand began in earnest," according to analysts at brokerage PVM Oil Associates Ltd. Distillates, the analysts added, suffered from "a dip in domestic consumption and fall in exports."
However, extreme weather conditions in the U.S. Northeast should increase demand and crack spreads for distillates such as diesel and heating oil, according to analysts at Commerzbank.
Gasoline futures fell 2.09 cents, or 1.16%, to $1.7858 a gallon. Diesel futures fell 1.83 cents, or 0.88%, to $2.0587 a gallon.
Oil market observers will be looking ahead to an EIA report Jan. 9 outlining the agency's outlook for 2019 and the implications for U.S. crude production.
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(END) Dow Jones Newswires
January 05, 2018 15:34 ET (20:34 GMT)