By Amanda Cooper
LONDON - Oil rose on Tuesday, breaking a six-day streak of price falls, but with doubt swirling over OPEC's ability to force global crude inventories to drop, sentiment has turned more bearish.
Brent crude <LCOc1> was up 8 cents at $51.68 a barrel by 0940 GMT, while U.S. crude futures <CLc1> were up 10 cents at $49.33 a barrel.
Brent is down 10 percent since late 2016, despite efforts led by the Organization of the Petroleum Exporting Countries and Russia to cut output by 1.8 million barrels per day (bpd) in the first half of 2017.
Given that oil supplies remain at record highs, Stephen Schork of the Schork report said on Tuesday that "OPEC has failed miserably in its endeavor to balance the oil market".
JPMorgan said in its latest weekly market note to clients that "it is evident that ... crude markets are still struggling to clear (oversupply)".
The bank said it was closing its "August Brent long position at a loss."
JPMorgan said that to reduce the supply overhang, OPEC "will be forced to renew, and possibly deepen the agreement if they wish to keep prices much above $50 per barrel".
Russia said on Monday its oil output could climb to the highest rate in 30 years if OPEC and non-OPEC producers do not extend their supply reduction deal beyond June 30.
Extreme weakness in physical crude, where prices in the North Sea market have fallen to their lowest this year, is also acting as a drag on futures. [CRU/E]
However, with refinery maintenance around Europe and Russia set to peak in May at an estimated 1.5 million bpd, according to one analyst, crude demand will pick up and the long-awaited draw in global inventories should begin in earnest.
"If you look at the last six weeks, when you include the U.S., Europe, Singapore and floating storage, (inventories) have been going down on average by 8 million barrels a week. If you extend that to the end of the year, at that kind of pace, you would draw down 250 to 300 million barrels," SEB commodities strategist Bjarne Schieldrop said.
"With refineries out, you have a lot of crude oil sloshing around, creating weakness in the spot price ... we still have the OPEC meeting ahead of us on May 25 and it's always uncertain. But it doesn’t make sense to sell down to $45 ahead of that," he said.
(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson)