Oil prices slipped slightly on Wednesday in quiet pre-U.S. Thanksgiving holiday trading, as the market awaited news on output cuts from the OPEC+ producers group and looked for confirmation of a sharp build-up in U.S. crude stocks.
Brent crude futures fell $1.04 to $81.41 a barrel. U.S. West Texas Intermediate crude futures were down $1 to $76.80.
Both benchmarks have fallen for four straight weeks, and prices weakened further last week on growing concerns about the demand outlook.
Investors remained cautious ahead of Sunday's scheduled OPEC+ meeting, when the producer group may discuss deepening supply cuts due to slowing global economic growth.
On Monday, both contracts climbed about 2% after three OPEC+ sources told Reuters the group, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, was set to consider more oil supply cuts when it meets on Nov. 26.
"The upcoming meeting has been the key central focus for oil prices for now, with sentiments shrugging off the sharp build in U.S. crude inventories," said Jun Rong Yeap, a market strategist at IG.
OPEC+ is likely to extend or even deepen oil supply cuts into next year, analysts have predicted.
Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency's (IEA) oil markets and industry division said on Tuesday.
To support prices, OPEC and its allies will need to not only extend, but increase cuts, said John Evans of oil broker PVM in a note on Wednesday.
"A rollover of cuts and voluntary cuts will send the market south, for the current level of supply clamp is not enough to persuade the market that it is 'tight'," he said. "Oil is in for some tense and headline-reactive days."
U.S. crude stocks rose by nearly 9.1 million barrels in the week ended Nov. 17, according to market sources citing American Petroleum Institute figures on Tuesday.
Gasoline inventories dropped by about 1.79 million barrels, while distillate inventories fell by about 3.5 million barrels.
U.S. government data on stockpiles is due on Wednesday.
Thursday is a public holiday in the United States for Thanksgiving.