Brude crude turned lower this morning, despite yesterday's cooperation pledge by two of the world's biggest oil producers.
Brent crude, the global benchmark, fell as much as 0.61 per cent to 47.34 per barrel in early morning trading. Its US counterpart, West Texas Intermediate, fared better swelling 1.35 per cent to $45.04.
Saudi Arabia and Russia said yesterday that they would not act immediately but could limit output in the future. But oil prices lost some of their earlier gains, as the market had hoped for a stronger sign that producers will agree to freeze output at a meeting in Algeria on 26-28 September.
"Oil prices staged a short-lived rally yesterday as Russia and Saudi Arabia seemed to signal collaboration in addressing the global supply glut, however markets soon adjusted as the significance of the statement fell short of hopes. Again," Mike van Dulken, head of research at Accendo Markets, said.
"Further reports today remain pessimistic for Saudi-Russian cooperation as the upcoming unofficial Opec meeting in Algeria looms."
It came as the Organisation of Petroleum Exporting Countries' secretary general, Mohammed Barkendo, and Iran's oil minister, Bijan Zanganeh met today in Tehran to discuss global oil market conditions and crude prices.
"The meeting between the Opec official and minister Zanganeh started a few minutes ago. Barkindo arrived in Tehran on Monday night," the ministry's official website said.
A senior Iranian official said yesterday that it was was ready to raise its output to four million barrels per day in a couple of months depending on market demand.