Bloomberg reported Saudi Arabia is likely to support extending Opec output cuts into the second half of 2017 in an effort to boost oil prices, according to a person familiar with the kingdom's internal discussions.
Benchmark Brent crude futures LCOc1 slid 24 cents, or 0.4 percent, to $55.62 a barrel in early Asian trade.
If Wednesday's price rises hold, they would mark the seventh straight daily increase.
U.S. West Texas Intermediate (WTI) rose by 11 cents to US$53.19 a barrel by 12:50 p.m. ET, after touching a five-week high of US$53.37.
Brent oil extended gains into an eighth straight session on Wednesday, having recovered almost all of March's losses, after Saudi Arabia was said to be pushing its fellow Opec members and some rivals to prolong supply cuts beyond June.
OPEC reduced its output to around 1.2 million barrels per day from the beginning of January and for six months - the first curb in eight years - to get rid of excess supply.
Based on direct communications with Nigeria, OPEC said the country's production levels were still around 1.269 million barrels per day.
Analysts said, however, that there are worries demand growth could falter, and other indicators were warning that the market had not yet cleared enough of its surplus to keep prices rising.
"Asia remains the single largest oil-importing region globally, and producers in the Middle East are prioritizing their sales to the region over European and US markets even as the OPEC and non-OPEC producers' pact remains in place".
Oil traded flat on Thursday after weekly data indicated a continued rise in US production, while an International Energy Agency (IEA) report said the market was close to balance.
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U.S. oil imports from the kingdom declined 24 per cent in the week ended March 31, according to Energy Information Administration (EIA) data.
An Global agency, Fitch Ratings, said Nigeria needs crude oil price of $139 per barrel to achieve balanced budget in 2017.
"It does appear that there is bit of focus on the data that came alongside inventory numbers which showed further increase in USA production".
Distillate stockpiles, which include diesel and heating oil, fell by 2.2 million barrels, versus expectations for a 885,000-barrel drop, the EIA data showed.Refinery crude runs rose by 268,000 barrels per day, EIA data showed.
However, while the agreement was triggered by a rational set of good intentions, it "just missed paving the road to hell" for OPEC as rival producers raised their output, Citi said. OPEC members have previously said they lean toward oil cut extensions, as long as non-members are also involved.
Futures rose as much as 0.7 percent in NY after advancing 3.2 percent last week following a US military strike on Syria.
US crude inventories hit a record 535.5 million barrels C-STK-T-EIA this month.
What's more, the cuts have made supply from nations not part of the deal such as the USA more affordable. Shipments were 888,000 bpd, the smallest since December.
Russia's oil production will reach a record high of 549 million tons in 2017 despite a planned output reduction, the country's Energy Minister Alexander Novak said Wednesday.
"It can be argued confidently that the market is already very close to balance", the agency said in its monthly report. Oil prices have been rising for a week on speculation about the cuts.
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