Excess oil burns from the chimney of al-Doura refinery in Baghdad April 9, 2012. OPEC is seeking a balance in world oil prices, but political instability rather than production issues are affecting the market price, Iraqi Oil Minister Abdul Kareem Luaibi said on Monday.  REUTERS/Mohammed Ameen (IRAQ - Tags: ENERGY POLITICS)

Excess oil burns from the chimney of al-Doura refinery in Baghdad April 9, 2012. OPEC is seeking a balance in world oil prices, but political instability rather than production issues are affecting the market price, Iraqi Oil Minister Abdul Kareem ... Luaibi said on Monday. REUTERS/Mohammed Ameen (IRAQ - Tags: ENERGY POLITICS) (Reuters)

Oil Under Pressure as Supply Glut Weighs

Markets Dow Jones Newswires

Oil prices slipped Thursday after bearish data from the U.S. Department of Energy's weekly stock report, which showed a small build in crude inventory.

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The inventory report showed resilience in U.S. shale oil production, which at 9.182 million barrels a day last week was only 30,000 barrels a day less than the previous week.

The news will heap more pressure on Saudi Arabia to agree to some sort of compromise on its high-production strategy ahead of the Dec. 4 meeting of the Organization of the Petroleum Exporting Countries. Most analysts, though, say they believe Saudi Arabia will not back down.

Brent, the global crude benchmark, was down 0.36% at $43.98 for cargoes loading in January. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.30% at $40.22 for its December deliveries.

Some analysts expect a small rebound as traders take advantage of the low prices. The WTI contract for December enters its last two days of trading and traders are already looking towards January.

January prices for WTI are about $1.40 a barrel higher than December.

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Others, though, say a likely U.S. interest rate rise in December will strengthen the dollar and increase the pressure on global oil prices.

"Oil market sentiment has turned back to 'max bearish' mode," London-based Energy Aspects said in an analyst note. "Talk of $20 oil is back."

Not all oil markets are expected to suffer.

Demand for heating fuel in Europe is expected to increase as the mild start to the winter season attributed to the weather phenomenon El Nino is expected to end soon.

"Temperatures in Europe will see a significant drop over the weekend [and] European traders will start next week in winter mode," said Olivier Jakob from the Swiss-based analysts Petromatrix.