Oil prices fell on Wednesday after OPEC increased signals that it would hold off making any major production cuts this week.
With U.S. trading subdued by the approaching Thanksgiving Day holiday, activity was thin and prices choppy, hitting near four-year lows early in the day. U.S. weekly oil inventory data showed a bigger than expected build in crude stockpiles, although the data had little impact.
OPEC Gulf oil producers have reached a consensus not to cut oil output when OPEC meets Thursday, a Gulf OPEC delegate told Reuters.
Saudi Oil Minister Ali al-Naimi confirmed the Gulf states had reached a unified decision, but did not specify what the consensus was. Naimi said he believed the oil market "will stabilize itself eventually," increasing speculation the Organization of the Petroleum Exporting Countries' (OPEC) largest producer and exporter, would not support an output cut at its Thursday meeting.
"The market will fix itself ultimately," UAE Oil Minister Suhail bin Mohammed al-Mazroui said in an interview.
Iranian Oil Minister Bijan Zangeneh, often among the first to call for cuts, added to expectations the group will not take any dramatic action in Vienna, saying he and Naimi were now "very close" in their positions and that there was "unity" in the group to monitor the market.
Benchmark Brent futures settled down 58 cents at $77.75 a barrel. U.S. crude fell 40 cents to $73.69, having hit a low of $73.30.
"It's all about OPEC - volatility is up across the board on options," said Tariq Zahir of Tyche Capital.
The increasingly bearish view on prices is prompting more traders to start shorting the market, brokers said.
On Tuesday, U.S. WTI futures open interest rose despite a fall in prices, likely a sign new shorts were entering positions in the market just before OPEC's Thursday decision, said Ed Kevelson, Head of US Energy OTC at Newedge.
Oil prices have dropped by a third since June and some OPEC members have called for the cartel to reduce production sharply in an attempt to tighten the market. Predictions for the OPEC meeting range from a large output cut to no action at all.
U.S. crude inventories rose by 1.9 million barrels in the last week, compared with analysts' expectations for an increase of 467,000 barrels, the EIA said.
(By Jessica Resnick-Ault; Additional reporting by Henning Gloystein in Singapore, Jack Stubbs and Ahmed Aboulenein; Editing by William Hardy, Chizu Nomiyama, Chris Reese and Richard Chang)