Oil prices slid early today as Iran vowed to ramp up output and rig reductions paused in the US, then crude futures pared losses on data showing a stockpile drawdown at the US delivery hub.
Oil fell $1 a barrel or more in early trade, the day after the Mehr news reported that Iran's Deputy Oil Minister Rokneddin Javadi said the country's crude exports, excluding gas condensates, would reach 2.2 million barrels per day (bpd) by the middle of summer from two million bpd now.
On Friday, an industry report showed the number of oil rigs operated by US drillers held steady for the first time this year, following a near two-year slump in the count.
Oil pared losses after a report showed a stockpile drawdown at the Cushing, Oklahoma delivery hub for US West Texas Intermediate (WTI) futures.
Market intelligence firm Genscape reported an inventory drop of 978,862 barrels in Cushing during the week to 20 May, traders who saw the data said.
WTI's front-month was down 30 cents at $48.11 a barrel by 4.07pm Irish time after plumbing a session low at $47.40.
Brent's front-month was down 52 cents at $48.20, off the day's bottom of $47.58.
"Upward price momentum appears to be slowing as we feel that this late winter/spring bull move is in a very advanced stage with only about $3 to $4 a barrel remaining on the upside in referencing either WTI or Brent futures," said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.
Reduced US production and supply outages from Venezuela to Libya and Canada have lifted oil prices about 80% from 12-year lows hit this winter of around $27 for Brent and $26 for WTI.
Still, prices remain less than half the levels reached in mid 2014, when crude traded above $100.
Goldman Sachs said in a research report it expected U.S. shale crude productivity gains through 2020, which will push average breakevens for shale plays to below $50 per barrel for US crude.
It raised its average Brent forecast to $45 per barrel this year, from $39, while it said West Texas Intermediate would average $45 per barrel this year, up from $38 previously.