Oil prices fell further on Friday as swelling inventories depressed sentiment despite widespread expectations that the Organization of the Petroleum Exporting Countries (OPEC) and Russia would agree some form of production cut next week.
The two global oil benchmarks, North Sea Brent and US crude, have had their weakest month for more than 10 years in November, losing more than 20 percent as global supply has outstripped demand.
Brent futures fell 98 cents, or 1.7 percent, to $58.53 a barrel by 11:26 a.m. EDT . US crude dropped $1.16, or 2.2 percent, to $50.29 a barrel. Both contracts were on course for their eighth consecutive week of falls, with Brent on track to drop 11.9 percent and US crude 10.7 percent.
Before the OPEC meeting, the world's top three producers - the United States, Russia and Saudi Arabia - will be part of a meeting this weekend of the Group of 20 industrialised nations in Buenos Aires, Argentina.
Early next week, markets are likely to be driven by sentiment on trade talks between the US and China at the G20 meeting, before attention shifts to OPEC, said analysts from Capital Economics in a note to clients.
"By the end of the week, markets will be firmly focussed on the biannual OPEC meeting on Thursday and Friday and oil prices could fall sharply if OPEC leaves output unchanged," the analysts said. "We expect OPEC to announce a small cut in production, in conjunction with Russia."
Surging oil production in the United States, Russia and by members of the Middle East-dominated OPEC has helped fill global inventories and create a glut in some markets.
A slowdown in oil demand growth is compounding the emerging oversupply.
"At the heart of the malaise are concerns that OPEC+ will not do enough to address the current oversupply," said Stephen Brennock, analyst at London brokerage PVM Oil.
The weakness in sentiment is visible in the Brent forward price curve, which now has prices for future delivery above those for immediate dispatch, a structure known as "contango", which can make it attractive to put oil into storage.
A monthly Reuters survey indicates that output in November from the 12 OPEC members with supply reduction targets under a previous production agreement fell 110,000 barrels per day from October, while total OPEC output decreased by 160,000 bpd.
To rein in the glut, OPEC and its main partner Russia are discussing supply cuts and are due to meet in Vienna on Dec. 6 and 7 to agree production strategy.
"The next OPEC meeting is going to prove a pivotal moment for the direction of oil prices in 2019," BNP Paribas strategist Harry Tchilinguirian told Reuters Global Oil Forum.
"A decision will have to be made against a background of strong US shale oil supply growth, and for now, weaker expectations on global oil demand growth."
On Friday, a CME group indicator suggested that expectations of a production cut were weakening. The tool, known as OpecWatch, uses West Texas Intermediate crude oil options markets to calculate the probabilities of certain outcomes of OPEC meetings. The market sentiment has shifted from a 32 percent expectation of unchanged production targets on Wednesday to about a 50 percent chance of unchanged targets on Friday, CME Group said.
Oil inventories are rising fast in the United States, where crude stocks have risen for 10 straight weeks to 450.5 million barrels, the most in a year, as production remains at an all-time high of 11.7 million bpd, according to the Energy Information Administration (EIA).
Meanwhile, US oil reserves in 2017 exceeded a 47-year-old record when they increased 6.4 billion barrels, or 19.5 percent, to 39.2 billion barrels, the EIA said this week.
Weekly data on the US drilling rig count, an indicator of future production, will be released at 1 p.m.