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Brent crude slipped near $81 a barrel on Wednesday, hovering just above a four-year low as the growing oil glut created by the US shale boom continued to outweigh concerns about supplies from Libya.
With oil prices down 30 per cent since June, delegates in the Organization of the Petroleum Exporting Countries (Opec) are starting to suggest they may push for an informal output cut of around 500,000 barrels per day (bpd) when the producer group meets in Vienna on November 27.
But they have warned an agreement within Opec will not be easy, and many oil traders and analysts doubt members will take a decisive stance.
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Brent for December delivery fell 43 cents to $81.24 by 1140 GMT. It dropped 67 cents on Tuesday after first touching $80.46, its lowest since September 2010.
US crude was down 64 cents at $77.30 a barrel.
Oversupply, doubts over whether Opec will cut production and a strong dollar were weighing on prices, traders said. A stronger US currency makes dollar-priced commodities more expensive for other countries.
Commerzbank analyst Carsten Fritsch said an unofficial 500,000-bpd cut by Opec would be “by no means enough to restore any sort of balance” to the oil market.
“Evidently the market is keen to test out Opec’s pain threshold,” Fritsch said.
Potential supply disruptions from Opec member Libya may reduce the group's need to cut production, analysts said.
Exports remained blocked at Libya's 120,000-bpd Hariga port by protesters involved in a wage dispute although talks to resolve the issue were under way, an oil official said on Tuesday. The El Sharara oilfield is also closed.
US oil inventory data due on Wednesday and Thursday could show a build in crude stocks of 800,000 barrels in the week ended November 7, according to a Reuters poll of analysts. The data has been delayed for a day by a federal holiday.
