Crude oil prices dipped in European trading Thursday morning, approaching the lows of Tuesday as the US stocks increase encouraged further position sell-offs.
At 1045 GMT, ICE Brent futures were down 53 cents/b at $62.95/b, while the NYMEX January light sweet crude contract was down 61 cents/b at $54.02/b.
"There is a bearish cloud over the market," Bjarne Schieldrop, Chief Analyst Commodities at SEB Bank, said Thursday morning. "[The market] is still negative due to rising inventories."
The US Energy Information Administration Wednesday reported a 4.85 million barrel build in US crude stocks for the week ended November 16, exceeding analysts' build expectation of 3.8 million barrels when surveyed by S&P Global Platts Monday.
This followed a surprise draw in stock levels reported by the American Petroleum Institute Tuesday that indicated a draw in stocks of 1.5 million barrels for the week ended November 16.
US President Donald Trump also continues to play a role in the market, analysts said Thursday morning, adding however that his statements regarding lowering the oil price come at a time when the complex was falling anyway.
Trump thanked Saudi Arabia for low oil prices in a tweet on Wednesday, but added that he wants prices to go lower.
"Oil prices getting lower," Trump said on Twitter. "Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let's go lower."
Trump seemed to be comparing WTI and Brent prices in his tweet.
Questions still remain as to whether Saudi Arabia will cut production following the support it has received.
"It therefore remains to be seen whether Saudi Arabia will cut production and thereby snub a US president who is continuing to hold a protective hand over the Saudi dynasty," Commerzbank analysts said in a morning note Thursday.
Schieldrop was more positive about the likelihood of production cuts, saying that it would be "strange if OPEC sat back and decided to produce full throttle" and that he expected the minimum message to come out of the OPEC meeting on December 6 to be "that they will manage inventories so that they don't rise again."
When it comes to expectations for the next move in the market, analysts had differing opinions Thursday morning, particularly with the US celebrating Thanksgiving Day.
"The oil market tends to be volatile when the US is on holiday... The weekly oil statistics provided a good excuse for shorts to cover some of their positions but the retracement is not expected to last," PVM analysts said in a morning note Wednesday.
Commerzbank analysts however said in their morning note that "no end to the downswing is in sight for the foreseeable future."
