Oil prices steady ahead of US inventory data

Oil prices steadied on Tuesday following a six-day decline, ahead of the Energy Information Administration’s (EIA) report on Wednesday that is expected to show US crude stockpiles falling for the third week in a row.

Brent crude was last up 0.1 percent at $51.63 a barrel (bbl), while West Texas Intermediate (WTI) last traded 0.2 percent lower at $49.14/bbl.

US crude inventories have dropped for two consecutive weeks after rising to 535.5 million barrels at the end of March, the highest level in weekly data compiled by the EIA since 1982.

Crude stocks last fell by 1 million barrels to 532.3 million barrels, in the week ending April 17.

Brent crude hit a peak of $56.23/bbl earlier this month, but the rally has faltered amid concerns that higher US output could offset production cuts by OPEC and non-member countries.

US drillers added five rigs last week, according to data from Baker Hughes.

"Oil markets may be destined for further punishment as the persistent oversupply woes inhibit investor attraction towards the commodity," said Lukman Otunuga, research analyst at FXTM.

"From a technical standpoint, previous support around $50 could transform into a dynamic resistance that encourages a decline towards $49 and $48, respectively,” he added.

OPEC and non-member oil producers will meet on May 25 to discuss extending their six-month output deal agreed on last year, to curb oversupply and boost prices.

Saudi energy minister Khalid Al-Falih and Kuwaiti oil minister Essam Al-Marzouq last week said they expected the global pact to be extended beyond June, backed by higher compliance from non-OPEC producers.