Fuel pump

Oil prices have fallen as focus turns back to an oversupply of the market from political tensions in the Middle East.

Brent fell 46 cents to $45.71 a barrel, while the West Texas Intermediate (WTI) futures slipped 21 cents at $42.83 per barrel, Reuters reported.

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Oil prices increased on Wednesday following a rise in US crude stocks and a decline in US oil rig counts, hinting that companies were waiting for higher prices before returning to the well pad.

The market experienced a slight impact due from political tensions in the Middle East after Turkey shot down a Russian bomber on Monday.

"Geopolitical tension in the Middle East could not impact the higher production despite high inventories."

However, geopolitical tension in the Middle East could not impact the higher production despite high inventories.

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The Organization of the Petroleum Exporting Countries (OPEC) decided to keep production at peak levels, which alarmed some of the group’s weaker members worried about a fall in prices towards $20.

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The US Energy Information Administration said that smaller-than-expected increase in the US inventories gave support to crude, with stocks rising one million barrels in the week to 20 November. This is against the expectations of analysts for a 1.2 million barrel rise.

Platts’s analytics and forecasting unit Platts Bentek said that oil production from key US shale formations in North Dakota and Texas remained flat in October versus September.

Oil production from the Eagle Ford shale basin in Texas also remained flat during the month.

Image: Oil prices slipped as focus shifts to supply glut. Photo: courtesy of domdeen/ FreeDigitalPhotos.net.