The Organization of the Petroleum Exporting Countries and other leading oil producers have pledged to curb output by 1.8 million barrels per day (bpd), with Russia's contribution of cuts amounting to 300,000 bpd to be gradually phased in.
Brent crude futures LCOc1 fell 41 cents by 1447 GMT to $51.71 per barrel after hitting a session high of $52.57 a barrel.
Oil dropped below US$50 a barrel as growing USA crude production hinders OPEC-led efforts to ease a global supply glut.
Iran's Oil Minister Bijan Zanganeh was quoted as saying earlier this week that Tehran supports the extension of the agreement between OPEC and non-OPEC producers to cut their production targets. After posting three straight weekly gains on expectations OPEC will extend its supply cuts, crude is now set for a drop this week following a decline of more than 3.5 percent on Wednesday.More news: UID for cows: Opposition chides Centre's "mis-focused" policy
"Everything was really shaky today as people are afraid to get in before the expiration", said Phil Flynn, senior market analyst at Price Futures Group, referring to the four-day losing streak.
US stock futures were rising Thursday after oil prices rebounded and tensions with North Korea eased.
"The (lack of) reaction can either be attributed to saturation, as such news is released on nearly a daily basis, or to the fact that the foremost goal of the OPEC agreement-namely to reduce the huge stocks of crude oil and oil products-is still a long way from being achieved", Commerzbank said in a note. The producers need to extend their deal to cut supplies through the end of the year amid concerns that Russian Federation is lagging behind on its pledged reductions, the bank said.
Omani Oil and Gas Minister Mohammad bin Hamad al-Rumhy said a "quite high" number of producers favoured extending the supply restraint agreement. S. producers will increase output anew, potentially sending stockpiles higher again. Right now, oil is selling for over $50 a barrel on global markets.More news: Mel B is being sued by former nanny for defamation
The only countries exempted from the production cuts are Nigeria and Libya.
Compliance from non-OPEC members has increased, al-Marzouq said, adding that Russian Federation is preliminarily consenting to a likely extension.
USA crude output may rise by 455,000 barrels a day in the fourth quarter from a year earlier across the Permian, Eagle Ford, Bakken and Niobrara shale plays, assuming the rig count remains at current levels, according to Goldman Sachs. However, given that the economic and political stresses they face at home - that could be exacerbated by another dip in oil prices - they're likely to go along with it, says Helima Croft, Head of Commodity Strategy at RBC Capital Markets.More news: Trump should stop playing his game of budget brinkmanship