Crude prices ended 2017 with a bang on Friday, with West Texas Intermediate closing above $60 for the first time in over two years, and Brent said to be supported by strong demand from China.
US crude production rose 11% on the year in the fourth week of December, but because 9-20% of output has been exported since September, inventories were down 13% that week.
"The tug-of-war between OPEC and the US will continue to pressure oil from trading above $60 a barrel in 2018", said Kim Kwangrae, a Seoul-based commodities analyst at Samsung Futures Inc. Brent crude futures-the worldwide benchmark-were also up, rising 45 cents or 0.7% to $66.61 a barrel, CNBC reported.
Crude oil were lower on Friday as expectations OPEC and other producers will extend their production cut agreement were offset by forecasts US output will continue to grow with prices holding near 28-month highs. Since the start of the year, Brent and WTI have risen by 17 and 12%, respectively, although the price rises from mid-2017 are much stronger, at almost 50%.
US production is expected to rise to 9.2 million barrels per day (bpd) in 2017 and a record 10.0 million bpd in 2018 from 8.9 million bpd in 2016, according to federal energy projections this week.
The vast majority of Canadian oil output comes from the oil sands, which trades at a discount to the North American benchmark price because it is more expensive to refine and amid a lack of pipeline options to get it all safely and quickly to market. Inventories declined 1% week-over-week and 54.2 MMbbls or 11.15% year-over-year.
U.S. oil production, which has risen more than 16 percent since mid-2016, is expected to surpass 10 million bpd next year, some analysts said.
Total crude oil imports to China, one of the world's biggest oil consumers, rebounded to the second-highest level on record in November at 9.01 million barrels per day (bpd). The cuts started last January and are scheduled to cover all of 2018.
Consultancy JBC Energy said Libyan pipeline outages had "no major impact on exports".