USA crude stocks fell last week as refineries hiked output, while gasoline stocks decreased and distillate inventories fell, the Energy Information Administration said on Wednesday.
U.S. West Texas Intermediate (WTI) crude was at $48.39, down 27 cents, or 0.6%. Iraq is committed to cut its share of output for an additional six months to achieve better prices, Prime Minister Haider Al-Abadi said at a news conference in Baghdad.
"The most closely watched data point on the supply side is US crude production", said researchers.
The EIA still expects US production to average 9.31 million bpd in 2017.Crude stocks have been edging lower after hitting a record 535.5 million barrels at the end of March.
Crude oil exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday. The analysts expected for a decrease of 2.4 million barrels, reported a national news portal.
Brent crude fell US$1.10 a barrel to a low of US$51.11 but recovered most its losses to trade around $52.00, down 21 cents, by 1415 GMT (10.15 a.m. ET). Several members have voiced support for the proposal to extend curbs after Russian Federation and Saudi Arabia said global inventories haven't yet fallen to targeted levels.
"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers", ANZ said in a research note. Iran was not subject to the stringent production cuts of other large Opec producers when the first agreement was signed on 30 November 2016.
"Crude stocks are still higher than last year's stock levels". OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
North Sea oil shipments to Asia have also been at record highs this year, with 19 tankers delivering in Q1, and a similar amount expected to go to Asia in the second quarter.
Based on the current price action, it looks as if an OPEC agreement to extend the production cuts may be enough to hold prices in a range, but an agreement to make deeper output cuts may be needed to sustain the rally.