Oil did win some support after data showed that Russian oil output fell slightly to 11 million barrels per day (bpd) in April from 11.05 million bpd in March.
Oil has been weighed down by the market's impatience with the slow pace of inventory drawdown globally, even after major oil producers agreed to cut production by 1.8 million barrels per day for the first half of 2017. An extension to the Opec agreement is becoming increasingly likely. Prices, based on the front-month May contract lost about 2.5% in April.
Improving technology and falling prices meant companies could make a profit out of shale oil.
The American Petroleum Institute (API) will report its estimates of crude and refined product stocks after the market close in the U.s. on Tuesday to be followed by the Energy Information Administration with official figures on Wednesday.
NYMEX crude for June delivery was down 10 cents at $49.23 a barrel by 0204 GMT. However, outlook is still downbeat as USA shale producers continue to crank up their output.
Then there are unexpected gains from elsewhere around the world. So it is offsetting some of the OPEC cuts. But with the possibility that oil prices may fall below US$40 if the deal is not extended, in the end Saudi Arabia may once again choose higher oil prices over market share. Adding to this atmosphere of plentiful production are Libya's Shara and El Feel oil fields which are capable of producing almost 400,000 bpd production after protests blocking the pipelines came to an end.
The return of bearishness is borne out by the latest trading trends in the futures market. Money managers reduced wagers that oil futures would rise on both sides of the Atlantic in the week to April 25, reports show. "The shale oil production trend is definitely bullish, which is bearish for prices", Michael Lynch, president of Strategic Energy & Economic Research, said in a Bloomberg interview. Libya's output rose to more than 700,000 bpd as the OPEC member's biggest oil field and another deposit in its western region resumed pumping after a halt.
On Friday, both of the US' largest oil producers, ExxonMobil and Chevron, announced sharp increases in earnings for the first quarter and indicated their intention of investing more in USA shale oilfields. It also said it has plans to keep boosting production.
But with President-elect Trump promising to make the United States independent of outside energy supplies, OPEC still has a battle to fight to stay competitive.
Industry insiders cite gasoline demand as a key factor in preventing crude prices from rising but the story does not end there. "So what we are seeing right now is that benefit of the doubt shouldn't have been given", John Kilduff said on CNCB.