Oil prices slipped on Thursday as markets recovered from shock over U.S. President-elect Donald Trump's surprise victory and focused on oversupply concerns, as well as whether OPEC will decide later this month to cut production.
Most markets shook off post-election losses and bounced back on Thursday, but oil still faces a glut that has kept prices under pressure for much of the past two years.
The Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on Nov. 30 for talks on output cuts. It has sought cooperation from non-members, including Russia, but doubts remain over whether they can come to an agreement.
U.S. crude's front-month discount to the second-month widened to the biggest in nearly three months on Thursday, with traders pointing to domestic oversupply amid data showing builds in stockpiles.
The U.S. Energy Information Administration on Wednesday reported a 2.4 million-barrel rise in domestic crude inventories to 485 million barrels last week.
That depressed the market even as stockpiles at the U.S. delivery hub for crude futures in Cushing, Oklahoma dropped by 663,916 barrels for the week, according to traders, citing energy monitoring service Genscape.
The International Energy Agency (IEA) said on Thursday the global market will remain in surplus unless OPEC can reach an agreement at its Nov. 30 meeting.
"If the supply surplus persists in 2017, there must be some risk of prices falling back," the IEA said in its monthly report.
Prices will likely rebound, at least temporarily, in the coming days and may go above $50 a barrel as traders cling to the hope of an OPEC deal, said Fawad Razaqzada, analyst at Forex.com.
"Although there is so much doubt about the prospects of a production cut or freeze deal between the OPEC and Russia, an agreement is still possible," he said.
Russian Energy Minister Alexander Novak said on Thursday he saw higher chances of reaching a deal than before, and that global crude output could be frozen at November levels if an agreement is reached.
Investors are still assessing the impact of the election of Trump, whose anti-trade stance has the potential to dampen the global economy.
"Any slowdown would lead to lower oil demand growth and defer a recovery in oil markets," said Paul McConnell, analyst at Wood Mackenzie.