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Europe closes lower, oil falls further after OPEC report

European shares closed largely lower on Wednesday, continuing a declining trend as Greek political fears and slumping oil prices weigh.

Markets had shown signs of a rebound earlier in the session, but turning lower in the afternoon. The pan-European Euro Stoxx 600 index closed around 0.3 percent lower, with the U.K.'s FTSE 100 index and the French CAC closing unofficially down 0.4 percent and 0.8 percent respectively.

The German DAX ended up around 0.1 percent.

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Concerns about oil prices continued to weigh on equity markets. Brent crude oil slipped to a five-year low below $65 on Wednesday after the Organization of Petroleum Exporting Countries (OPEC) forecast lower demand for its oil next year.

BP shares closed around 1.6 percent lower after the oil supermajor announced a cost-cutting program in response to tumbling oil prices. Other oil giants also performed poorly, with Royal Dutch Shell ending down around 2.4 percent.

Read MoreBP expects $1B restructuring charge

Greece fears; Ukraine watched

In Greece, Prime Minister Antonis Samaras named his candidate on Tuesday for a snap presidential vote to be held next week. Samaras called the election on Monday, surprising investors and causing the Greek stock market to plunge and pushing bond yields higher.

The benchmark Athens stock index closed down around 1 percent on Wednesday.

Meanwhile, tension between Ukraine and Russia remained heightened after Ukraine's military accused separatists of violating a a ceasefire. The ceasefire was hoped to be a prelude to a more lasting cessation of hostilities.

Read MoreUkraine: IMF finds $15B black hole in finances

In the U.K., Bank of England Governor Mark Carney told the Birmingham Post on Wednesday that interest rates would rise, despite the recent fall in inflation. This came as the British Chambers of Commerce warned that low interest rates were essential for strong growth in 2015.

In France, industrial production numbers slipped 0.8 percent in October, compared to the month before, missing market expectations.

Airbus tanks

In stocks news, shares of Airbus plunged to close around 9 percent lower after the European plane maker warned production of its A330 could be cut further in 2016. In addition, Qatar Airways has also delayed delivery of the new A350 jetliner.

There was better news for Ashtead Group, whose shares closed around 9 percent higher after the British equipment rental company lifted its full-year expectations on Wednesday.

HSBC shares closed around 0.3 percent lower, little affected by media reports that the bank had sacked its head of foreign exchange trading amid allegations of currency manipulation.

Outside of the U.K., Italian multinational Prysmian saw its shares close around 2.8 percent up after Goldman Sachs raised its outlook to "buy" from a "neutral."

Across the Atlantic, U.S. stocks broadly declined on Wednesday, furthering the week's losses.

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