LONDON: Oil prices nudged down in late European trade on Tuesday, retreating from positive territory as traders digested a flurry of comments from OPEC states about the prospects of an output cut and ahead of US crude inventory data.
Brent crude oil futures were down 20 cents at $51.26 a barrel by 1400 GMT. US West Texas Intermediate (WTI) crude futures fell by 4 cents to $50.48 a barrel.
Analysts said that oil would trade in a range ahead of crude oil inventory data from the American Petroleum Institute, due at 2030 GMT, followed by official Energy Information Administration data on Wednesday.
"Crude oil does not want to drop the support (that was tested on Monday) until it sees if it can use the weekly US statistics for another test of an upside break-out," Petromatrix analysts said in a note.
US crude inventories were forecast to have risen last week by 800,000 barrels to 469.5 million barrels, which would be bearish for prices, compared with the previous week's decline of 5 million barrels.
But inventory data has surprised by showing drawdowns in six of the seven past weeks, including the largest fall since 1999. The data is closely watched to gauge supply and demand in the world's biggest crude consumer.
The verbal jockeying among the Organization of the Petroleum Exporting Countries (OPEC) continued ahead of a Nov. 30 meeting that could cut output, with Iraq emerging as a possible dissenter and non-member Russia as a potentially compliant collaborator.
"So for now the market remains range-bound while jumping from one headline to another," said Ole Hansen, head of commodity research at Saxo Bank.
Data from the US Commodity Futures Trading Commission (CFTC) and the InterContinental Exchange shows that money managers added to their bets on a rising crude price at the fastest monthly pace on record in October.
But that could unravel quickly, leading to sharp drops if OPEC fails to strike a deal on a significant production cut.
"OPEC has to deliver a meaningful cut otherwise the risk of a 15-20 percent (drop in oil prices) could surface fairly quickly. OPEC knows this and on that basis I would expect a deal, but the devil's in the details," Hansen said.
Iraq said on Sunday that it wanted to be exempt from output curbs because it needs money to fight Islamic State, a position it reiterated on Tuesday when OPEC Secretary General Mohammed Barkindo arrived for talks.
Fellow OPEC members Iran, Nigeria and Libya are already expected to be exempt from any deal that may be struck at the Nov. 30 meeting, all of which would put pressure on Saudi Arabia to shoulder a significant proportion of any cuts.
OPEC's production has reached record highs as states vie for market share and some overcome conflict-related obstacles to production. Nigeria's oil production has risen to 1.9 million barrels per day, its petroleum ministry said on Tuesday.
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