Oil prices steadied on Thursday as a fall in US crude inventories balanced doubts that producers would cut output as promised to reduce global oversupply.
Benchmark Brent crude oil was down 15 cents a barrel at $56.31 by 0900 GMT. US light crude oil was down 10 cents a barrel at $53.16. Both contracts rose around 2 per cent on Wednesday.
The Organization of the Petroleum Exporting Countries and other key producers have agreed to reduce output to try to drain a worldwide glut that has weighed on prices for more than two years.
But some investors suspect OPEC may not cut production as much as it has promised, keeping stockpiles high.
“There remains a question mark over whether OPEC, with a long history of non-compliance, will actually follow through (with the cuts). Very few respondents expect full compliance," Singapore Exchange (SGX) said on Thursday, citing results from a survey of its participants.
“Three-quarters of those surveyed went for (crude) prices averaging within the current $50-$60 a barrel range (for 2017)," SGX added.
Analysts at US bank Goldman Sachs said that even if OPEC reduced production as promised, there was “only moderate oil spot price upside given the expected supply response to higher oil prices and new production".
The US bank said it expected Brent prices to peak at $59 a barrel by mid-2017.
In a sign of compliance with the cuts, major OPEC producer Abu Dhabi National Oil Company (ADNOC) has scheduled maintenance at oilfields for March and April, although it was not immediately clear how much exports might fall.
Oil prices found support from an American Petroleum Institute (API) report late on Wednesday showing US crude inventories fell 7.4 million barrels in the week ended December 30 to 482.7 million.
“Tonight's Energy Information Administration (EIA) inventory numbers should also show a similarly large drawdown in crude oil inventories,” said Jonathan Chan, analyst at Phillip Futures.
EIA data on US weekly inventories is due to be published at 11 a.m. EST (1600 GMT) on Thursday.
A Reuters survey of analysts forecast the EIA report would show U.S. crude stocks declined by about 2.2 million barrels in the week to December 30.