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Most
markets shook off post-election losses and bounced back on
Thursday.
But the oil market is heavily oversupplied and investors are
focusing on a gathering of the Organization of the Petroleum
Exporting Countries on Nov. 30, which may lead to output cuts.
Brent crude was up 30 cents at $46.66 a barrel by 1100 GMT. U.S.
light crude was down 10 cents at $45.17.
"If no agreement is reached and some individual members continue
to expand their production then the market will remain in
surplus throughout the year, with little prospect of oil prices
rising significantly higher," the International Energy Agency (IEA)
said in its monthly report on Thursday.
"If the supply surplus persists in 2017 there must be some risk
of prices falling back," the IEA added.
Carsten Fritsch, senior oil and commodities analyst at
Commerzbank in Frankfurt, agreed:
"We are still in an oversupplied market and that is not going to
change for the foreseeable future unless OPEC cuts."
The market was dampened by a 2.4-million-barrel rise in U.S.
crude inventories to 485 million barrels last week, reported by
the Energy Information Administration on Wednesday.
Investors are still assessing the long-term impact of a Trump
presidency on world oil supply and demand.
BMI Research said the billionaire's expected pro oil and gas
industry policies might mean U.S. "production of oil and gas
could recover at a faster rate in 2017 as developers grow more
encouraged".
Goldman Sachs said a Trump presidency would likely result in
higher investment and, in time, increased U.S. oil output as the
president-elect has said he would deregulate fossil fuel
production.
Internationally, the bank said Trump's threat of renewed U.S.
sanctions against OPEC member Iran would "further incentivise
Iran to maximize production in the short term rather than comply
to an OPEC freeze".
This reinforced traders' doubts over the ability of OPEC and
other producers such as Russia to trim output to prop up prices.
(Additional reporting by Henning Gloystein in Singapore; editing
by Dale Hudson and Jason Neely)
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