"Don't expect anything unless Iran suddenly changes its mind and agrees to a freeze. But I don't think they will," an OPEC source familiar with discussions said.
Sources told Reuters last week that Saudi Arabia had offered to reduce its output if Iran agreed to freeze production, but Iran downplayed the chances of a deal, saying the meetings in Algiers on the sidelines of the International Energy Forum this week were only advisory.
Analysts said that current high production in Russia and Saudi Arabia, combined with potential increases from Libya and Nigeria, made discussions in Algiers somewhat hollow.
Russia's oil minister on Tuesday also said that the country would want to freeze oil output at current levels; Russia's oil output recently touched an all-time high of 11.75 million barrels per day (bpd).
"The announcements in Algeria contrast sharply with reality," analysts at Commerzbank said in a note, adding "all the signs point therefore to the comfortable supply situation continuing, that is to say to ongoing overproduction."
U.S. investment bank Goldman Sachs cut its price forecast for WTI crude in the fourth quarter to $43 a barrel, from a $45-$50 range, saying that it expects global supply to exceed demand by 400,000 barrels per day (bpd) in the quarter.
A strong U.S. dollar, which makes commodities like crude oil more expensive for holders of other currencies, also hampered oil prices that had strengthened in the previous session.
Traders were also looking ahead to data on U.S. oil stocks due later on Tuesday from the American Petroleum Institute (API).
U.S. commercial crude oil stocks likely rose by an average of 2.8 million barrels to 507.4 million barrels in the week to Sept. 23, reversing three weeks of unexpected drawdowns, a Reuters poll of seven analysts showed.