Brent slips on OPEC worry; U.S. crude steady ahead of inventory data

Tue Dec 1, 2015 4:56pm EST
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By Barani Krishnan

NEW YORK (Reuters) - Brent crude futures settled lower on Tuesday on bets OPEC will not cut output to stem a supply glut when the world's biggest oil producers meet later this week, while U.S. crude steadied as some traders expected a stockpile drop.

Expectations are high that Friday's meeting of the Organization of the Petroleum Exporting Countries in Vienna will choose to continue pumping crude at record levels to defend market share against non-member oil producers such as the United States and Russia.

The U.S. Labor Department's closely watched jobs data for November was also due on Friday. Stronger employment numbers could help the Federal Reserve decide on the first U.S. rate hike in nearly a decade, sending the dollar higher. That, and the likelihood of no OPEC cuts, could drive Brent below the $40-a-barrel mark, traders said.

"We see renewed selling after the OPEC meeting is defined since we expect oil balances to tilt further in a bearish direction amidst additional strengthening in the U.S. dollar," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

Brent LCOc1 settled down 17 cents, or 0.4 percent, at $44.44 a barrel.

U.S. crude's West Texas Intermediate (WTI) futures CLc1 finished the session up 20 cents at $41.85.

While WTI was also under pressure from the global oversupply in oil, it could see some reprieve if U.S. government data on Wednesday shows an inventory decline.

A Reuters poll of analysts forecast on Tuesday that U.S. crude stockpiles possibly fell 500,000 barrels last week after nine consecutive weeks of builds.   Continued...

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson, North Dakota June 26, 2015.  REUTERS/Andrew Cullen