As if to herald what might really take place later this year, and again contrary to Sen's concerns, US production rose to 9.78 million bpd in the latest week according to the Energy Information Administration - and this plus weaker refined products demand caused West Texas Intermediate on Friday to drop 57 cents to $62.21 and Brent to fall 45 cents to $67.62 per barrel.
Oil prices retreated from their highest level in 2.5 years on Friday as surging USA production appeared to offset supply fears stoked by anti-government rallies in Tehran. That was 61 cents, or 1 percent, below their last close.
Oil hit its highest since May 2015 this week, supported by falling inventories, strong demand and high Opec compliance. The previous day it touched $68.27, also the highest since May 2015.
OPEC, supported by Russian Federation and other non-members, begun to hammer out a deal to cut supplies again in 2016, aiming to lift prices by removing a glut built up in the previous two years.More news: Jaguars defeat Bills 10-3
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That has helped tighten markets.
Oil closed above $62 a barrel for the first time in more than three years after US crude stockpiles shrank by the most since the summer driving season.
Crude inventories fell by 7.4 million barrels in the week to December 29, compared with analysts' expectations for a decrease of 5.1 million barrels. At 424.5 million barrels, United States crude oil inventories are in the middle of the average range for this time of year.
"Oil production disruptions (in Iran) remain a very distant threat. disruptions in the North Sea have been removed". However, some traders are questioning the associated risks of hanging out too long above those levels, especially the risks related to the impact on the demand, while other analysts cast doubts that there exists an upside for prices above these levels and qualify the current market situation as "an overly rosy picture". "You're seeing a little bit more of a bullish push-up in the price of oil", Mark Watkins, a Park City, Utah-based regional investment manager at U.S. Bank Wealth Management, which oversees $142 billion in assets, said by telephone.