Oil retreated after Saudi Arabia's influential oil minister said Tuesday it was up to the market to determine prices, effectively ruling out an intervention to prop them up.

US benchmark West Texas Intermediate (WTI) for delivery in December dipped 60 cents to $43.38 per barrel compared with Monday's close.

Brent North Sea crude for December delivery was down 29 cents at $47.25 per barrel in London midday deals.

"Prices are a function of supply and demand," Ali al-Naimi told reporters on the sidelines of a mining conference in the Saudi capital.

He made no further comment on oil prices, which have dropped by more than half from early last year to below $50 a barrel.

As OPEC's largest producer and the only one with significant spare capacity, Saudi Arabia has traditionally acted to stabilise the market by adjusting output.

But in an increasingly competitive environment the cartel has kept production levels unchanged, in what analysts say is a bid to push out new players, in particular US shale producers.

In its October monthly report, the Organization of the Petroleum Exporting Countries said market pressures appear to be easing.

"Fundamental factors (of supply and demand) that have weighed on the market for more than a year have persisted, but are starting to show signs of alleviation," it said, slightly adjusting upwards its 2015 forecast for crude demand.

The cartel also reduced its forecast for production by non-OPEC members.

Oil prices have plunged from peaks above $100 a barrel early last year owing to slackening demand in the global economy, record production by OPEC and a strong US dollar.