Oil prices dipped on Thursday, struggling to recover from four-month lows due to investor concerns that OPEC-led supply cuts were not yet reducing record U.S. crude inventories.
Brent crude futures, the international benchmark for oil, fell 11 cents to $50.53 per barrel by 2:25 p.m. ET (1835 GMT). It held above Wednesday's slide to $49.71, its lowest level since Nov. 30 when OPEC announced plans to cut output.
U.S. West Texas Intermediate (WTI) crude futures settled Thursday's session 34 cents lower at $47.70 a barrel, after threatening to fall below $47 on Wednesday.
Brent remains well below this year's high above $58, hit shortly after Jan. 1 when the deal between the Organization of the Petroleum Exporting Countries and non-OPEC states to curb supplies by 1.8 million barrels per day (bpd) came into effect.
OPEC has broadly met its commitments to reduce output, but non-OPEC producers have yet to fully deliver on pledged cuts and U.S. shale oil producers have been pumping more oil after crude prices recovered from last year's drop below $30.
"OPEC is going to do their best to jawbone this market higher, but it seems the market is going to do its best to reject that," said Oliver Sloup, director of managed futures at IITrader.com. "We think there won't be as much follow-through from OPEC as there has been in the past."
The market may come under further pressure as U.S. rig counts continue to rise, indicating production growth is outpacing demand, he said.
"Headwinds from rising production and compliance issues will keep the upside limited for now," said Ole Hansen, head of commodity strategy at Saxo Bank, adding that any upside for Brent would likely be limited to $53, with risks "skewed to the downside."
Oil ministers from OPEC and some non-OPEC states meet on Sunday in Kuwait, where they are expected to discuss compliance.
Global stockpiles have risen even with OPEC-led cuts. On Wednesday, data from the U.S. Energy Information Administration showed U.S. inventories jumped by a bigger-than-expected 5 million barrels last week to 533.1 million.
U.S. oil production has risen over 8 percent since mid-2016 to more than 9.13 million barrels per day (bpd) to levels comparable in late 2014, when the oil market slump started.
Greg McKenna, chief market strategist at futures brokerage AxiTrader, said OPEC was "underwriting the investment plans and returns of their competition in U.S. shale oil."
McKenna said there was a risk of oil prices dropping further due to U.S. output and a lack of compliance by some producers who said they would cut production.
London-based Barclays bank offered a more upbeat assessment, saying the latest oil price weakness would not last into the second quarter. The bank forecast a modest recovery.
"We see a rebound to the high $50 and $60 range in Q2 as inventories draw and the market readies for the peak driving and demand season," the bank wrote in a note to clients.
It said inventories held by industrialized nations would be eroded by the end of the second quarter, sliding to OPEC's target level of the five-year average.
But there were also signs of a bloated market in Asia, where China's gasoline imports slumped while its refiners sent huge volumes overseas as they refine more fuel than the domestic market can absorb.