Oil prices fell on Friday and were on track to end the week lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the economic health of the world's second-largest oil consumer, China, after it reported the steepest falls in overall exports since 2009, Reuters reported.
Record Chinese crude imports of 8.6 million barrels per day (bpd) in December helped to buoy prices somewhat, traders said, but they could not hide underlying fears over the overall health of the world's second-biggest economy.
Brent crude futures LCOc1 were trading 32 cents lower at $55.69 a barrel by 11:55 a.m. EST (1655 GMT) and were on track for a weekly loss of about 2.5 percent.
U.S. West Texas Intermediate CLc1 crude futures fell by 41 cents to $52.60, also set for a weekly drop of 2.5 percent.
"China right now seems more interested in keeping capital in the country than focusing on growth overall," Phil Flynn, analyst at Price Futures Group in Chicago said.
"We have to watch this situation develop because this is one threat to what is an otherwise wildly bullish scenario for oil in the coming year."
On the supply side, there was some market support from top crude exporter Saudi Arabia, which said that its output had fallen below 10 million bpd to levels last seen in February 2015 and that it expects to make even deeper cuts next month.
However, hard evidence of export reductions has yet to emerge, two weeks into the month in which the cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, such as Russia, were supposed to start. Many analysts expect compliance of 50 percent to 80 percent at best.
"I think the bigger issues for oil are less about demand right now and a lot more about the supply condition," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
"EIA data and our own government policies have to leave you thinking that a U.S. production response may unwind all the production cuts Saudi Arabia and others are planning."
Data from the U.S. Energy Information Administration showed crude production rose notably last week, particularly in the lower 48 states. Overall production was 8.95 million bpd last week, most since April of last year.
Saudi Arabia is likely to cut heavy oil production rather than light in order to maximize revenues and as U.S. supply comes back, more light barrels will likely enter the market, Bank of America Merrill Lynch said in a note.
The market also awaited U.S. drilling rig count data from energy services firm Baker Hughes Inc at 1 p.m. EST (1800 GMT), the indicator future U.S. production.