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LONDON (Reuters) – Oil prices fell on Thursday after US crude inventories reached their highest level since December, fueling worries about a global glut, but OPEC is talking about a reduction in oil prices. production to limit losses.
A labyrinth of crude oil pipelines and equipment appears under the US and Texan flags during a guided tour of the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, USA, on June 9, 2016. REUTERS / Richard Carson
The benchmark Brent index fell 67 cents to 62.82 dollars a barrel for 0904 GMT, after losing up to 1 dollar earlier in the session. The US WTI fell more than a dollar before falling 79 cents to 53.84 dollars.
US crude oil inventories rose 4.9 million barrels to 446.91 million barrels last week, the US Energy Information Administration (EIA) said Wednesday, its highest level since December.
US crude oil production also remained at a record 11.7 million barrels per day (bpd), the EIA said.
Tamas Varga, an analyst at PVM brokerage, said the market trend was "still bearish". "The question is what OPEC will do in December, will they reduce, and if so, how much?", He said.
The Organization of the Petroleum Exporting Countries worries about the occurrence of an overabundance that could drive down prices. However, Saudi Arabia, OPEC's main exporter, is also under pressure to prevent prices from rising again.
"Oil prices are down. Awesome! Like a big tax break for America and the world. Have fun! … Thanks to Saudi Arabia, but let's go lower! Said Wednesday US President Donald Trump on Twitter.
The oil market was also affected by weak Asian markets as investors worried about slowing global growth in the face of rising US interest rates and trade tensions.
The trading should remain muted until Monday due to Thursday's Thanksgiving holiday in the United States.
A larger amount of US crude could also head to the market, bottlenecks of US pipelines being eliminated in the second half of 2019. The increase in US oil production has overtaken the US market. additional crude transport capacity.
To counter the rise in supply, OPEC plans to reach an agreement to cut production at its December 6 meeting, even though Iran, an OPEC member, should resist any voluntary reduction. Russia, an OPEC ally, has also shown no sign of its intention to participate in a possible reduction.
"Even if it is mentioned that OPEC and Russia could again accept a reduction in production, the problem is that not all parties will be able to reach an agreement," said William O 'Loughlin, Investment Analyst at Rivkin Securities in Australia.
Report by Julia Payne in London and Henning Gloystein in Singapore; Edited by Christian Schmollinger and Edmund Blair
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