Oil prices yesterday fell close to its lowest in a week as the market discounted the latest talk by the Organisation of Petroleum Exporting Countries (OPEC) that it would extend output cuts beyond June.
Brent futures for May delivery were down 53 cents, or 1 per cent, at $51.09 a barrel.
U.S. West Texas Intermediate crude was down 68 cents, or 1.4 per cent, at $47.54 per barrel on the last day the April contract is the front-month, its lowest level since March 14.
That decline also came ahead of the release of weekly United States (U.S.) crude inventory data that is expected to show a crude stock build of 2.6 million barrels, according to a Reuters poll.
Sources within OPEC have indicated that its members increasingly favour extended production cuts but want the backing of non-OPEC memers, such as Russia, which have yet to deliver fully on existing reductions.
?OPEC is sticking with a plan that has not worked,? said Phil Davis, managing partner at PSW Investments in Woodland Park, New Jersey, noting they are not offering more cuts and no new countries are joining in the cuts.
The group and some non-OPEC producers agreed to curb production from Jan. 1 by 1.8 million barrels per day (bpd) for six months to drain crude from record stockpiles. But inventories remain stubbornly large.
?We think it is very unlikely that Russia will actively take part in any extension of the production cuts that goes beyond paying lip service to the agreement,? Commerzbank said in a note, adding that it would be premature for investors to ?pin their hopes? on an extension.
Commerzbank said OPEC cuts would need to last into the fourth quarter to achieve the group?s goal of reducing record oil stockpiles in industrialised nations to their five-year average.