Oil prices have slipped on account of rising US crude oil inventories, but further losses were limited by support from expectations of a supply cut by the Organization of the Petroleum Exporting Countries (OPEC) members.
International benchmark Brent crude futures went down 67 cents to reach $62.82 a barrel, while US WTI dropped by 79 cents to $53.84, Reuters reported.
Earlier in the session, the contracts fell around $1.
According to data released by the US Energy Information Administration (EIA), US commercial crude oil inventories increased by 4.9 million barrels to reach 446.91 million barrels for the week ending 16 November. This represents the highest level of the crude stocks since last December.
The EIA added that the US crude oil production stands at a record 11.7 million barrels per day (Mbpd).
PVM brokerage analyst Tamas Varga said that the market trend was ‘still bearish’.
Varga said: “The question is what OPEC will do in December, will they cut, and if so, by how much?”
Given the rising US production and swelling supplies, OPEC intends to reduce output as it is concerned that the 2014 supply glut situation could return.
However, de facto OPEC leader Saudi Arabia is under pressure from Washington to ensure oil prices stay at reduced prices.
On 21 November, US President Donald Trump posted on his Twitter account: “Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy!… Thank you to Saudi Arabia, but let’s go lower!”
Another major factor pressuring prices is the weak Asian markets as investors are worried about slowing global economic growth due to increasing US interest rates and trade tensions.
OPEC is looking to reach an agreement at the upcoming meeting next month to cut production. However, OPEC member Iran is not expected to agree to any move to cut supplies.
Rivkin Securities investment analyst William O’Loughlin told Reuters: “While there is talk that OPEC plus Russia may again agree to a production cut, the concern is that not all relevant parties will be able to come to an agreement.”