Oil prices settled little changed on Tuesday after several OPEC members voiced support for prolonging supply cuts through March 2018 to reduce a global crude glut, Reuters reported.
Crude prices dipped later in post-settlement trade after data from the American Petroleum Institute showed an unexpected build in crude and distillate products inventories. Forecasters had expected another draw in U.S. crude stocks.
The market will watch to see whether the build reported by the API is confirmed by official U.S. Energy Information Administration data due at 10:30 a.m. EDT on Wednesday.
API said U.S. crude oil inventories rose 882,000 barrels for the week ended May 12, contrary to analyst forecasts in a Reuters poll for a fall of 2.4 million barrels. Distillate stocks grew 1.8 million barrels; analysts had expected a decline of 1.1 million barrels.
Brent futures were down 60 cents, or 1.1 percent, to $51.22 a barrel as of 4:43 p.m. EDT. Earlier, Brent had settled down 17 cents at $51.65 a barrel. In late trade, U.S. crude dropped 58 cents to $48.26 a barrel; it had settled at $48.66, off 19 cents.
Prices have rebounded about 10 percent since hitting five-month lows 11 days ago. Members of the Organization of the Petroleum Exporting Countries have stated their intentions to keep supply cuts going through next year. The market has grown skeptical, as inventories have been drawing down slowly even after OPEC and several big non-OPEC producers agreed at the end of November to cut production 1.8 million barrels a day in the first half of 2017.
Officials in Kuwait, Iraq, Iran and Venezuela voiced support for extending the crude output cut. The meeting to decide on the output cut extension has been set for May 25.
"Be careful what you ask for. If you do get prices in the mid-to-upper $50s all that's going to do is encourage a lot of production in the U.S.," said Nauman Barakat, head of the energy desk at ADM Investor Services in New York.
Russian Energy Minister Alexander Novak said the proposed extension of output cuts aimed to bring global commercial oil inventories down to the five-year average and stabilize the market.