Oil prices dipped on Tuesday as higher output in the United States, Canada and Libya outweighed lower production by Russia and major OPEC exporters ahead of the release of U.S. data expected to show a fourth consecutive decline in crude stocks, Reuters reported.
Benchmark Brent LCOc1 futures were down 40 cents, or 0.8 percent, at $51.12 a barrel by 12:22 p.m. EDT. U.S. West Texas Intermediate crude CLc1 was down 44 cents, or 0.9 percent, at $48.40 per barrel.
That kept both U.S. and Brent futures in technically oversold territory on most days since late April. WTI was trading at its lowest since April 27.
"We've got more output from Libya and the United States and there is no certainty OPEC will keep production cuts in place at their meeting in May," said Phil Davis, managing partner at PSW Investments in Woodland Park, New Jersey.
"Until OPEC removes the fear that they might not extend their production cuts, it will be hard for oil to get a bid," Davis said.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers plan to meet on May 25 and are widely expected to keep output limits for the rest of the year.
Last year, OPEC and other producers including Russia agreed to cut output by 1.8 million barrels per day (bpd) for the first half of 2017 to try to reduce a global glut.
Russian oil production fell slightly last month to 11 million bpd, almost hitting its output target under the deal with OPEC, Energy Ministry data showed on Tuesday.
OPEC oil output fell for a fourth straight month in April, a Reuters survey showed on Tuesday, dropping to 31.97 million bpd as Nigeria and Libya pumped less crude.
Libya's National Oil Co, however, said on Monday that production had risen above 760,000 bpd to its highest since December 2014, and it plans to keep boosting production.
In addition, U.S. crude output C-OUT-T-EIA is at its highest since August 2015, while the Syncrude Canada oil sands project has started shipping crude from its Mildred Lake upgrader again after cutting production due to a fire in March. [RIG/U]
BP Plc (BP.L) Chief Financial Officer Brian Gilvary told Reuters on Tuesday that oil inventories would keep falling this year.
"If the OPEC cuts get rolled into the second half of the year, that will underpin oil prices," Gilvary said. "We are managing things around $50-$55 a barrel. That's probably the range we would expect for the rest of the year."
Analysts forecast U.S. crude inventories fell about 2.2 million barrels last week, according to a Reuters poll, making a fourth straight week of declines from a record high reached at the end of March. Stocks, however, are still seen about 10 percent above year-end levels.
The American Petroleum Institute will release inventory data at 4:30 p.m. EDT on Tuesday.