International oil prices dip on production cut doubts

International oil prices dipped on Friday over doubts that a planned cut in crude production could be achieved on a scale sufficient to rebalance a market that has been oversupplied for two years.

International Brent crude oil futures were trading at $51.85 per barrel at 0050 GMT, down 18 cents, or 0.35 percent, from their previous close.

Traders said the dip was a result of skepticism that a planned oil output cut by the Organization of the Petroleum Exporting Countries (OPEC) and potentially non-OPEC member Russia would be sufficient to rein in a global production overhang which has been ongoing for two years and still stands around half a million barrels per day (bpd) in excess of consumption.

“Talk of cutting output in some quarters appears to be morphing into talks of a freeze in supply. We are doubtful that OPEC’s efforts, even if successful in achieving a targeted 32.5 million bpd in collective output, will prove sufficient to materially alter the global oil balance and deliver a substantial reduction in oil inventories,” French bank BNP Paribas said in a note to clients.

OPEC’s crude oil production stood at a record 33.6 million bpd in September.

U.S. crude oil prices, however, edged up on the back of struggling domestic output and tightening fuel supplies.

After falling below $50 a barrel on Thursday, U.S. West Texas Intermediate (WTI) crude futures were trading at $50.47 per barrel at 0050 GMT, up 3cents from their last close.

“Oil prices (in the U.S.) rose overnight despite rising stockpiles in the U.S., as fuel supplies in the U.S. fell to the lowest level this year,” ANZ bank said in a morning note on Friday.

The U.S. Energy Information Administration (EIA) reported a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and a 1.9-million barrel decline for gasoline.

However, U.S. crude stocks rose much more than analysts expected last week, the first gain in six weeks.

Crude inventories swelled by 4.9 million barrels in the week to Oct. 7 to 474 million barrels. That followed five consecutive weeks of drawdowns.