Oil prices gain ahead of OPEC meeting

Turkey claimed the jet violated its air space, adding that it issued 10 warnings to Russian Federation in a span of 5 mins before firing the shots, Pentagon officials said.

President Tayyip Erdogan said on Wednesday Turkey did not want any escalation, saying it had acted simply to defend its own security and the “rights of our brothers” in Syria.

Oil prices headed south a year ago after the Organization of the Petroleum Exporting Countries embarked on a strategy of protecting its market share by pumping more crude despite the falling prices.

The world continues to be awash in crude oil ahead of the OPEC meeting December 4, raising the possibility that prices could again dip below $40 a barrel. OPEC accounts for 30% of global crude oil output.

West Texas Intermediate for January delivery was at $43.08 a barrel on the New York Mercantile Exchange, up 4 cents, at 8 a.m. Hong Kong time.

Meanwhile, gasoline inventories jumped by 2.5 million barrels, and distillate fuel stocks were up one million barrels.

“Low volume holiday trade, largely off on strong dollar and hard sell-off in Chinese equity markets”, Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates said in a commentary on oil.

US crude oil futures dipped on Wednesday on profit-taking after the prices rallied to a two-week high on the previous session due to heightening geopolitical tensions in the Middle East with Turkey’s downing of a Russian warplane. The contract is up 2 percent this week.

“From a fundamental point of view, an increase in OPEC’s production quota is much required; Indonesia’s inclusion into the cartel will add roughly 800,000 barrels a day into the overall production pipeline will give OPEC the ideal excuse to propose a higher quota”, said Gan.

The reality is that there are now many competing interests amongst oil exporters which are clearly evident when you take into account Iran’s recent announcement that there is no requirement for them to consult with OPEC about increased production levels.

But brokers and analysts also see fading demand growth, a troubling sign for prices in a world where production and stockpiles are still high. Brent was down 46 cents to $45.71 a barrel at 0859 GMT. Diesel futures fell 3% to $1.3597 a gallon.

The impetus for the big move was a report by the U.S. Energy Information Administration announcing that crude oil inventory figures rose by 0.90 million barrels.