Oil falls in holiday-thinned trade on supply glut concerns

Investing.com – Oil prices declined in holiday-thinned trade on Thursday, amid uncertainty about how quickly the global glut of crude is set to shrink.

On the ICE Futures Exchange in London, Brent oil for January delivery slumped 72 cents, or 1.55%, to trade at $45.45 a barrel during U.S. morning hours. A day earlier, prices inched up 5 cents, or 0.11%.
Saudi Arabia said earlier this week that it is prepared to use all measures necessary to ensure a stable oil market. The world’s biggest oil producer added that it is ready to cooperate with OPEC and non-OPEC producers in order to stabilize prices.
But on Wednesday, Saudi Aramco, the Kingdom’s largest oil producer, said it will not cut production in 2016, but will meet customer’s demands.
OPEC will meet on December 4 to review their output strategy. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by OPEC last year not to cut production in order to defend their market share.
Elsewhere, crude oil for delivery in January on the New York Mercantile Exchange dipped 32 cents, or 0.74%, to trade at $42.72 a barrel.
On Wednesday, Nymex futures rose 17 cents, or 0.4%, after the U.S. Energy Information Administration said crude oil inventories rose by 961,000 barrels last week, below expectations for a gain of 1.2 million barrels.
Total U.S. crude oil inventories stood at 488.2 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Meanwhile, industry research group Baker Hughes (N:BHI) said Wednesday that the number of rigs drilling for oil in the U.S. declined by 9 to 555 last week. A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the future.
The spread between the Brent and the WTI crude contracts stood at $2.73 a barrel, compared to $3.13 by close of trade on Wednesday.
Trade volumes were expected to remain light on Thursday, with U.S. markets closed for the Thanksgiving holiday.