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Oil prices fell today after touching the December-2014 highs the earlier day due to drop in imports of crude oil by China.

US West Texas Intermediate (WTI) crude futures CLc1 slipped 46 cents down to reach $63.34 a barrel, while Brent crude futures LCOc1 fell 29 cents to settle at $68.97 a barrel, reported Reuters.

Since the beginning of this year, analysts and traders have been warning of a fall in prices.

China’s crude oil imports in December dropped to 33.7 million tonnes from 37.04 million in November.

Despite the slip in prices, the market condition continues to remain strong, primarily due to output cuts by the OPEC and Russia.

“There is potential for oil prices to move higher as inventories normalise.”

Edison Investment Research analyst Sanjeev Bahl  was quoted by the news agency as saying in a 2018 outlook: “OPEC has acted successfully to reduce the inventory overhang and demand growth remains robust in the short-term.”

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By GlobalData

The output cuts that began in January 2017 will last through the end of this year.

Bahl added: “There is potential for oil prices to move higher as inventories normalise.”

Commercial crude oil inventories C-STK-T-EIA fell almost five million barrels in the week of 5 January to 419.5 million barrels in the US. This is slightly below the five-year average of more than 420 million barrels.

Global Risk Management in its 2018 outlook stated that ‘the likelihood of elevated oil prices this year seems imminent’ primarily due to OPEC-led cut and political risk in countries such as Iran, Venezuela, and Libya.