Oil prices erased early losses to trade higher on Wednesday, but the gains were limited as market participants remained sceptical producers would reach an agreement to freeze output to rein in a global supply glut.
London Brent crude for November delivery was up 33 cents at $47.59 a barrel by 0300 GMT, after settling down 37 cents on Tuesday.
NYMEX crude for October delivery was up 31 cents at $45.14.
Oil prices had hit a one-week high on Monday after Russia and Saudi Arabia agreed to cooperate on stabilising the oil market, but they have since fallen due to mounting uncertainty over a deal.
Despite rebounding this year, oil is trading at less than half mid-2014 peaks above $100 a barrel.
Output freeze
The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia are expected to discuss an output freeze at informal talks in Algeria from September 26-28.
Few analysts believe OPEC will be successful in making price gains last, especially when the biggest crude exporters such as Saudi Arabia and Iran are pumping all they can in a fight to raise market share.
Analysts at Citi warned that Iranian involvement would be a key hurdle for an OPEC decision and added it was unlikely that any viable agreement would impact physical market balances.
Key hurdle
Saudi Arabia’s Foreign Minister Adel al-Jubeir had said on Tuesday it would go along with a freeze in oil output if other producers agreed one but cautioned that Iran, which is aiming to raise output to pre-sanction levels, could foil any attempt to limit output.
Iran had signalled on Tuesday it was prepared to work with Saudi Arabia and Russia to prop up oil prices as it began to bargain with OPEC on possible exemptions from output limits.
Traders said US crude was supported by Genscape data showing a draw of some 700,000 barrels last week at the Cushing, Oklahoma, delivery hub for US crude futures.
Crude inventories
US commercial crude inventories likely dropped by 100,000 barrels last week after rising for two straight weeks, a preliminary Reuters poll showed on Tuesday.
Gasoline stocks likely fell by 500,000 barrels, while distillate stocks are forecast to have increased by 1 million barrels, the poll showed.
The American Petroleum Institute is set to release its weekly oil data on Wednesday, delayed a day from usual due to the Labor Day holiday on Monday.