Picture: REUTERS
Picture: REUTERS

London — Oil prices eased from three-year highs on Friday but were still on track to end the week higher for a fourth week in a row.

Brent crude futures traded 15c lower at $69.11 a barrel at 10.11am GMT. The contract broke above $70 a barrel on Thursday for the first time since December 2014.

US West Texas Intermediate (WTI) crude futures were at $63.45 a barrel, down 35c. The day before, WTI rose to its strongest since late 2014 at $64.77.

"It is remarkable to see that most market analysts believe that prices have rallied too far since consensus forecasts is significantly lower than the current spot prices," Hans van Cleef, senior energy economist at ABN Amro, said in a note. "On the other hand, most investors are still positioned to benefit from further price gains."

Analysts and traders warned about the risks of a price correction since the start of 2018, but they say overall market conditions remain strong, mainly due to output cuts led by oil cartel Opec and Russia.

In addition to the Opec and non-Opec production cuts of 1.8-million barrels per day (bpd) that are expected to last until the end of 2018, oil prices have found support from eight consecutive weeks of US crude inventory drops.

US commercial crude oil stocks fell almost 5-million barrels in the week to January 5, to 419.5-million barrels, or slightly below the five-year average of just more than 420-million barrels, the target for Opec and others involved in output cuts.

Relatively weak China December oil data weighed on prices, traders and analysts said. In December, China’s crude imports fell 9% month on month to 33.7-million tonnes, or 7.97-million bpd, customs data showed.

"The end of year decline is highly counter-seasonal, being the first month-on-month decline in December in at least five years," analysts at Vienna-based consultancy JBC Energy said.

This has contributed to a fall in Singapore refinery profit margins to below $6 a barrel this month, their lowest seasonal level in five years, leading some refiners to scale down crude runs.

An expected rise in US oil production to above 10-million bpd from 9.5-million bpd now has also weighed on prices.

A market survey of more than 1,000 energy professionals conducted by Reuters in January showed crude price expectations in a range of $60 to $70 per barrel for 2018.