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UPDATE 8-Oil eases on persistent supply glut, production outlook

Published 27/11/2015, 07:10 am
© Reuters.  UPDATE 8-Oil eases on persistent supply glut, production outlook
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* Trade thin as U.S. markets closed for Thanksgiving

* OPEC determined to keep pumping vigorously (Updates prices)

By Nia Williams

CALGARY, Alberta, Nov 26 (Reuters) - Oil prices fell on Thursday after six days of gains, as concerns that escalating tension in the Middle East could disrupt supply faded, and the focus returned to a persistent market glut.

Brent crude LCOc1 settled down 71 cents at $45.46 a barrel, having earlier dropped more than $1 to a session low of $45.00 a barrel. West Texas Intermediate (WTI) futures, the U.S. crude benchmark CLc1 , were 53 cents lower at $42.51 per barrel at 1957 GMT, after rising to $43.30 earlier in the session.

The downing of a Russian jet by Turkey on Monday helped push up oil prices this week on the risk that rising geopolitical tension could hit Middle East supplies.

By Thursday, however, those concerns were receding and had done little to shake the belief that global production will stay high even as stockpiles rise. A firmer dollar also weighed on oil as it makes it more expensive for holders of other currencies.

OPEC is determined to keep pumping oil to defend market share, alarming some of the group's weaker members who fear prices may slump towards $20. urn:newsml:reuters.com:*:nL8N13J2KU

"OPEC has been extremely explicit that it will not cut production in the face of low prices, and with Iran coming back to the market, it will produce more than 32 million barrels per day," said Bjarne Schieldrop, chief commodity analyst at SEB in Oslo.

"Stocks were building all of last year and this. It's starting to strain inventories and we're starting to run out of storage space."

Still, while stockpiles are high and rising in the United States and many European economies, in China commercial crude oil stocks at the end of October were down 4.4 percent from the previous month in their biggest drop since at least 2010, the official Xinhua News Agency reported on Thursday. urn:newsml:reuters.com:*:nL3N13I2MJ

Brent is down by more than 8 percent in November and by 20 percent this year, after tumbling from above $115 per barrel last year.

U.S. crude had been supported on Wednesday by a smaller-than-expected build in U.S. inventories and by a fall in oil rigs, a sign that drillers were waiting for higher prices before returning to the well pad. urn:newsml:reuters.com:*:nL1N13K1PN

The data helped prevent deeper losses for WTI futures on Thursday, although trading was thin due to the U.S. Thanksgiving holiday.

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