West Texas Intermediate was down by 86 cents, or 1.9%, at US$44.85.
"With an orderly Presidential transition in sight, vaccine boosters and expectations that OPEC+ will extend production cuts next week, oil markets completely ignored the unexpected 3.8 million-barrel climb in API U.S. crude inventories", said Jeffrey Halley, senior market analyst at OANDA.
"We maintain our bullish outlook for next year and target Brent to hit $60 per barrel at the end of 2021", he added.
A weak dollar has also provided support for crude prices as a lower dollar makes oil less expensive for buyers.
Brent has moved into backwardation, a market structure in which oil for immediate delivery costs more than supply later. Backwardation encourages inventories to be drawn down.
That makes it likely that OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation, will continue production cuts into 2021 after a meeting set to start on November 30 following technical talks this week. USA crude prices did not settle on Thursday due to the holiday.
On Thursday, Algerian Energy Minister Abdelmadjid Attar - who this year holds OPEC's rotating presidency - told Bloomberg News that the group must remain cautious because the recent surge in oil to $45 a barrel in NY this week could prove fragile. The contract had gained about 1.6% in the previous session.
Besides, in the latest flashpoint of an auspicious development in pandemic vaccine, British drugmaker AstraZeneca said late on Monday that its pandemic vaccine which it had developed in combination with the University of Oxford, could be 90 per cent effective, overturning an earlier statement that said the AstraZeneca vaccines were 62 per cent effective in late-stage human trials, fleshing up investors' hopes.
Still, it warned that "a pullback can not be ruled out amid less robust demand in the near term".
Also supporting oil and wider financial markets, U.S. President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden's administration.
Oil Futures trading at GMT 06.37; Brent: $+0.32 WTI: $+0.25.
(Fuel Oil, means 380 HS and VLSFO together).
All prices are based on Oil Future close yesterday evening Wednesday.