Brent crude futures fell 70 cents, or 1 per cent, to settle at $US68.61 a barrel after hitting a session low of $US68.28.
On the back of that news, West Texas Intermediate crude oil futures for next month delivery jumped 0.91% to $63.37 a barrel on NYMEX, alongside a 1.06% drop in RBOB gasoline futures to $1.8636 a gallon. Brent futures fell during the week by 1.8%, while WTI decreased by 1.5%.
Friday's fall came despite Baker Hughes weekly survey of oil rig use revealing a small fall in the number of United States oil rigs in use - down five to 747 this week, although that followed a rise of 10 rigs a week earlier.
"The pullback in relationship to the recent run-up is still very modest", he added.
But as futures prices were hitting three year and more highs midweek, the International Energy Agency (IEA) joined the US Energy Information Administration (IEA) and OPEC in reminding traders and others that the spectre of rising American production will be around for years.
"We should not limit our efforts to 2018".
"The stage was set for a strong expansion a year ago when non-OPEC supply, led by the USA.pushed up world production", offsetting output cuts by the Organization of the Petroleum Exporting Countries and other producers, the IEA said. USA crude supply alone could surpass 10 million barrels a day - beating out Saudi Arabia and Russian Federation for the title of world's largest oil producer.
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The US oil rig count, an indicator of future production, fell by five this week but at 747, was still much higher than the 551 rigs a year ago, according to General Electric Co's Baker Hughes energy services firm. The total active U.S. rig count, which includes oil and natural-gas rigs, dropped by 3 to 936, according to Baker Hughes. "People are starting to really question the validity of demand", Flynn said.
"If prices remain high, it is USA shale producers who are benefiting more than the Opec producers but if Opec doesn't do anything, they will also lose out, so they are basically treading a thin line between helping themselves and helping everybody else including shale producers", Mr Manibhandu noted.
Hedge funds have been increasing long positions steadily on expectations that tightening supply will keep prices buoyant. Oman is in favour of a new deal, he said without elaborating.
In a separate report, Intercontinental Exchange Inc said speculators trimmed positions in Brent in the week to January 16 from a record the week before, dropping 3,357 contracts to 570,795.
Faleh called for extending cooperation between OPEC and non-OPEC oil producers beyond 2018 after a deal to shore up crude prices. The current agreement on supply cuts is due to expire in December 2018.
OPEC has a self-imposed goal of bringing oil inventories in industrialised countries down to their five-year average.