SINGAPORE: Oil prices dipped on Tuesday on a rise in Iranian exports that adds to a global supply overhang, but a planned OPEC-led production cut later this year offered some support.
International Brent crude oil futures were trading at $50.70 per barrel at 0519 GMT, down 18 cents from their previous close.
U.S. West Texas Intermediate (WTI) crude was down 25 cents at $48.56 a barrel.
Traders said prices were dented by the latest rise in Iranian crude and condensate sales, which likely reached about 2.8 million barrels per day (bpd) in September, almost matching a 2011-peak in shipments before sanctions were imposed on the OPEC producer.
However, analysts said Iran will struggle to boost output further and reaching pre-sanctions levels makes it more likely Tehran will agree on some form of production constraint with other members of the Organization of the Petroleum Exporting Countries (OPEC), including its regional rival Saudi Arabia, which is also pumping oil near record levels.
There was optimism that OPEC producers, and perhaps also exporters outside the club like Russia, would find some form of agreement by the time the group meets in November, although the risks of failure remain.
"For now, optimism has returned and the market will anxiously await any confirmation of the agreement or additional non-OPEC participation," Morgan Stanley said in a note to clients.
It added that "the risk of disappointment is high, and fundamentals remain challenging/unchanged in the interim".
The U.S. bank said important price factors to watch for in coming weeks include talks on output with non-OPEC members, most notably with Russia, production within OPEC as its members try to squeeze out oil before any potential cut or freeze, hedging activity by producers into 2017 as forward price guidance, and U.S. inventory and import data.
The overall higher crude prices since the announcement of a potential supply cut by OPEC has hit profits in the refinery sector, where crude is the main feedstock.
Asian benchmark Singapore refinery margins have fallen almost a third in the last five days to under $5 per barrel.
Beyond the higher crude feedstock prices, traders said that a seasonal downturn in product demand amid an ongoing fuel supply overhang was also weighing on refinery products.
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