Oil prices marginally slip on glut, bleak outlook

Snapping six-day gaining streak, oil prices further eased in the global markets on the glut in supply. The concerns about geopolitical tension in the Middle East region could hit supplies were faded out and this puts more pressure on oil price.

Brent and the US crude oil futures were almost flat ahead of US Thanksgiving holiday.

Brent crude fell 77 cents to $45.40 a barrel. West Texas Intermediate (WTI) futures dropped by 32 cents at $42.72 per barrel. The US crude rose to $43.30 in early trading. Earlier sessions, oil price rose as mounting geopolitical tension was expected to impact oil supplies. 

The concerns were much stronger as news about downing a Russian jet by Turkey could further aggravate tension in the Middle East region.

Oil price rose on the concerns that about the tension in the Middle East region could disrupt the supply, noted Reuters. As these concerns about the geopolitical tensions were faded, the oil price started weakening as usual. 

Ahead of US Thanksgiving holiday, the US Brent and US crude oil futures were traded in a narrow range on 26 November (Thursday). US WTI futures narrowly down by just two cents to $43.02 a barrel. WTI futures shed 17 cents and closed at $43.04 a barrel on Wednesday. 

The US crude inched up as it was supported by US inventories, which rose smaller than expected. The US inventories rose one million barrels in the week ending 20 November registering ninth consecutive week growth, according to CNBC.

The analysts had a forecast of rising inventories to the tune of 1.2 million barrels. The drop in oil rigs also supported US crude price. 

However, these concerns about geopolitical tensions had little impact on global production as supplies keep piling up. The surging US dollar is also making oil expensive for buyers, who hold other currencies. 

Organization of Petroleum Exporting Countries (Opec) is firm on keeping the production level to maintain its market share. However, some weaker members of Opec are expressing their concern that oil price could slip to $20 a barrel if the present situation continues.

Bjarne Schieldrop, Chief Commodity Analyst at SEB in Oslo, said Opec has been "extremely explicit that it will not cut production in the face of low prices and with Iran coming back to the market, it'll produce more than 32 million barrels per day".

"The stocks were building all of last year and this. It's starting to strain inventories and we're starting to run out of storage space", he added.