US benchmark West Texas Intermediate for December fell 12 cents to $74.46 while Brent crude for January was down four cents at $78.06 in mid-morning trade.
“The market is keenly watching the outcome of the OPEC meeting next week,” said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy EY.
Analysts say the stance of Gulf nations within the Organization of the Petroleum Exporting Countries (OPEC) will be crucial for a positive decision on reducing supplies to boost prices, which have fallen by a third of their value since June.
Saudi Arabia, Qatar, the United Arab Emirates and Kuwait together pump a total 16.2 million barrels per day, or 52 percent of the 12-member cartel’s total output.
They account for two thirds of the group’s exports, according to figures from OPEC and other agencies.
“It is extremely unlikely for Gulf states to accept output cuts unless other OPEC members take the initiative… They need assurances other OPEC or non-OPEC producers won’t fill the gap,” Kuwaiti oil expert Kamel al-Harami told AFP.
“It is not in the interest of the Gulf states to cut output because they risk losing highly valuable market share,” the former oil executive said.
OPEC members Venezuela, Ecuador and Iran have so far indicated a preference for an output reduction in order to defend prices.
Dealers are also digesting a mixed US stockpiles report.
The Department of Energy said Thursday commercial crude reserves rose by a surprising 2.6 million barrels, instead of the 1.0 million drop expected by analysts.
Stocks of distillates including heating fuel fell by 2.1 million barrels, more than analysts’ estimate of a 1.4 million decline. -AFP