Oil dipped on Wednesday, weighed down by ongoing high supplies despite an OPEC-led production cut, but prices remained within a narrow trading band that has been in place since late January.
Brent crude futures LCOc1, the international benchmark for oil prices, were trading at $55.44 per barrel at 0423 GMT, down 14 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $52.74 a barrel, down 7 cents.
Traders said a reported rise in U.S. crude inventories was putting pressure on prices.
“The release of the American Petroleum Institute’s crude inventories at a much higher than expected 5.8 million barrels saw both Brent and WTI quickly give back… gains,” said Jeffrey Halley, senior market analyst future brokerage OANDA in Singapore.
The API data showed that commercial U.S. crude inventories now stood at 488 million barrels.
Swelling U.S. supplies are being countered by an effort by the Organization of the Petroleum Exporting Countries (OPEC) to prop up the market and end a global fuel supply glut.
As part of this, OPEC has said it will cut production by around 1.2 million barrels per day (bpd) in the first half of 2017. Other producers, including Russia, have pledged to cut another 600,000 bpd in output.
A Reuters survey published on Tuesday showed that OPEC’s output fell by over 1 million bpd in January to 32.27 million bpd between December and January.
“That’s a good start … to cut production to bring the market back toward balance,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.