By Scott DiSavino (Reuters)
NEW YORK - Oil prices slipped on Wednesday ahead of a U.S. petroleum inventory report and on doubts production cuts promised by OPEC and Russia would be deep enough to end a supply overhang that has weighed on markets for more than two years.
Brent <LCOc1> futures fell 32 cents, or 0.6 percent, to $53.61 a barrel by 10:10 a.m. EST (1510 GMT). U.S. crude <CLc1> fell 46 cents, or 0.9 percent, to $50.47 per barrel.
The U.S. Energy Information Administration (EIA) will release crude data for the week ended Dec. 2 at 10:30 a.m. EST on Wednesday.
Crude inventories fell by 2.2 million barrels last week to 485.4 million, compared with analysts' expectations in a Reuters poll for a decrease of 1 million barrels, the American Petroleum Institute (API) said in a report Tuesday night.
Oil prices surged almost 20 percent after the Organization of the Petroleum Exporting Countries and Russia announced last week that they would cut production next year in an effort to prop up markets.
"This market is marking time overnight as the OPEC agreement appears fully priced for the time being," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.
"From here, the market is likely to be taking a wait and see approach until evidence of actual OPEC curtailments is seen in about six or seven weeks," Ritterbusch said.
But doubts have emerged over whether the planned cuts will be enough to rebalance the market.
Since the deal was announced, OPEC and Russia have reported record production and output elsewhere is also resilient.
The EIA said on Tuesday it expected U.S. crude oil production for 2016 and 2017 to fall by less than previously expected.
OPEC and non-OPEC oil producers meet this weekend in Vienna to agree details of the output cut, which targets an overall reduction of around 1.5 million barrels per day (bpd).
OPEC member Nigeria, exempt from the cuts, said on Wednesday it hoped to boost its oil production to 2.1 million bpd in January, up from 1.9 million bpd now.
Despite widespread scepticism, many analysts say 2017 will likely see a more balanced oil market.
"Oil markets are on track to tighten over 2017, which will be accelerated by OPEC's decision to reduce production alongside non-OPEC countries," said BMI Research. "If effectively implemented, we expect the global oil market will return to balance in Q1 2017."
Oil production has been outpacing consumption by 1 to 2 million bpd since late 2014.
(Additional reporting by Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Jason Neely)