Oil market dips in Thanksgiving lull

A motorist filling up his vehicle at a petrol kiosk. (Photo: AFP/Federico Parra)

LONDON: World oil prices drifted lower on Thursday (Nov 26) in muted trading conditions amid the Thanksgiving Day holiday in top consumer United States.

At around 1200 GMT (8.00pm Singapore time), US benchmark West Texas Intermediate for delivery in January was down 12 cents at US$42.92 a barrel. Brent North Sea crude for January shed 51 cents compared with Wednesday's close to US$45.66 a barrel.

Despite the slender losses, WTI prices held close to US$43 after US commercial crude supplies rose at a slower pace, while jitters lingered over the shooting down by Turkey of a Russian warplane.

"Oil prices are trading largely unchanged at just shy of US$46 per barrel (Brent) and just under US$43 per barrel (WTI)," said Commerzbank analyst Carsten Fritsch. "As such, they are defending for the most part the gains they have accrued since Turkey shot down the Russian fighter jet on Tuesday."

Prices rose after Turkey downed a Russian warplane on the Syrian border on Tuesday because of fears that any escalation of the conflict would affect crude supplies. Russia on Wednesday accused Turkey of a "planned provocation" and a rescued pilot of the targeted jet said that no warning had been given.

"There are still tensions going on and they are giving a bullish push to prices," said Daniel Ang, an investment analyst with Phillip Futures in Singapore. "Tensions are still playing a part in the whole oil landscape."

The market ended on Wednesday on a firm note after a US inventory report showed increased petroleum supply, but separate data showed fewer drilling rigs in service. Data from the US Department of Energy showed that US oil supplies rose by 1.0 million barrels for the week ending Nov 20.

That was followed by a report from Baker Hughes showing a decline of nine oil rigs in the US to 555 for the week ending Nov 25. "US crude oil inventories are not increasing as much as before, so this is giving the market some bullish sentiment," added Ang.