Analysts are concerned the Organisation of the Petroleum Exporting Countries (Opec)'s production cuts won't be enough to raise crude prices.
Opec today revealed it reached a record high of more than 90 per cent compliance with its planned cuts, but oil prices plunged on the news.
Global benchmark Brent crude is trading down 2.13 per cent at around $55.49 a barrel while West Texas Intermediate is down 1.89 per cent around $52.84 per barrel.
"The good compliance rate of Opec seems to be priced in. The US rig count from Friday is weighing, the numbers support the shale comeback story," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.
Opec agreed to a landmark decision to curb production by about 1.2m bpd from the beginning of the year in order to prop up low oil prices and cut the global crude oversupply.
From the 11 Opec member countries with lowered production targets, supply dropped to 29.888m bpd in January, according to figures from secondary sources that Opec uses to monitor its output. Reuters' calculations put the reductions at a 93 per cent compliance rate.
Saudi Arabia made a huge contribution to the cuts – the top Opec oil producer told the cartel it reduced output more than expected last month by more than 700,000 bpd to 9.748m bpd.
Production by all Opec members, including Nigeria and Libya which were exempt, fell by 890,000 bpd to 32.14m bpd – the same as Opec's revised demand growth for 2017.
But oil prices, which surged last week on the International Energy Agency (IEA)'s estimated compliance rate of 90 per cent, failed to make gains today.
Analysts at ABN Amro have revised Brent forecasts down for the first half of this year to $50 from $55 a barrel – and said they could even drop towards $45 a barrel.