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Brent <LCOc1> was down 27 cents at $43.07 a barrel by 0908 GMT.
U.S. West Texas Intermediate (WTI) crude <CLc1> fell 28 cents to
$40.91.
Both contracts are on track for weekly gains of about 10% this
week, the first rise in three weeks.
Brent's six-month contango, a market structure where the
front-month Brent futures are trading at a discount to later
contracts implying current oversupply, has shrunk to around
$1.90 a barrel from $3.24 less than a month ago.
Norwegian oil company and labour officials said they would meet
with a state-appointed mediator on Friday in an attempt to bring
an end to a strike.
An escalation could almost triple the existing outage if no
solution is reached by Oct. 14, taking the total capacity cut to
about 934,000 barrels of oil equivalents per day.
"It goes without saying that a resolution to the conflict would
pull the rug from under bulls’ feet," PVM analysts said in a
note.
In the Gulf of Mexico, Hurricane Delta has shut 1.67 million
barrels per day, or 92% of the Gulf's oil output, the most since
2005 during Hurricane Katrina. Producers have also halted nearly
62% of the region's natural gas output, or 1.675 billion cubic
feet per day.
The Organization of the Petroleum Exporting Countries (OPEC)
said on Thursday world oil demand will plateau in the late 2030s
and could by then have begun to decline.
(Additional reporting by Aaron Sheldrick in Tokyo; Editing by
Elaine Hardcastle, Robert Birsel)
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