It was another difficult month for oil prices last month despite heightened geopolitical risk.
Upstream energy markets had another weak month in November, with both Brent and US crude showing month-on-month falls despite of rising tension in the Middle East and the arrival of winter.
Brent crude averaged US$46 per barrel in November, while West Texas Intermediate (WTI) averaged US$42.76, down 42% year on year and 7% month on month.
UBS said: “Currently the market is focusing on any prospect of a production cut and prices have been sensitive to any hint of this.
This week will be on the OPEC meeting on Friday and UBS said: “We expect no fundamental shift in strategy from OPEC.”
After managing to extend to weekly highs of US$42.58 on Monday, WTI oil reversed the rally on Wednesday, losing 2% to US$40.99 while Brent crude spilled 2.1% to US$43.48.
The strengthening Dollar may also have attributed to the factors which have pressured prices as commodities are priced in the currency.
Lukman Otunuga, a research analyst at FXTM, said: “Oil remains fundamentally bearish and with the reoccurring theme of an excessive oversupply in the markets complimented with the sluggish global demand haunting investor attraction, there may be a potential for a further fall.”