Investing.com - Oil prices were modestly higher on Thursday, but gains were held in check amid skepticism over a planned output cut by the Organization of the Petroleum Exporting Countries and after data showing an increase in stockpiles in key areas.
U.S. crude oil was trading at $49.91 a barrel at 09:19 GMT, up 15 cents or 0.34% from its last close.
Global benchmark Brent futures were at $53.22 a barrel, up 24 cents or 0.47%.
OPEC is to meet with non-OPEC producers to discuss output cuts this weekend but doubts have emerged over how effective the cuts will be at reducing massive oversupply that has pressured prices lower for more than two years.
Oil production has been outstripping consumption by between one to two million barrels per day since late 2014.
While OPEC’s agreement to cut production boosted oil prices to 16-month highs this week, some remain skeptical on the ability of major producers to adhere to output limits.
The deal will see the producer cartel cut output by 1.2 million barrels per day and will take effect from January 2017.
The agreement also included coordinated action with non-OPEC members, including Russia, who are expected to decrease production by 600,000 bpd.
Russia has pledged to “gradually” reduce production by 300,000 bpd next year.
But OPEC and Russia have reported that output hit record highs since the deal was announced last week, adding to fears that the global supply overhang could persist well into 2017.
Some analysts have also warned that the cuts are likely to cause other producers, particularly U.S. shale drillers, to quickly ramp up output as prices rise.
Meanwhile, the Energy Information Administration reported Wednesday that U.S. crude oil stockpiles declined by a larger than forecast 2.4 million barrels last week.
But a 3.8 million barrel increase at the Cushing, Oklahoma delivery hub for U.S. crude offset the overall decline in inventory.
Stockpiles of gasoline and distillates also saw big gains, with gasoline stockpiles increasing by 3.4 million barrels and distillates rising by 2.5 million barrels.