Oil prices were near two-month highs on Monday, putting July on track to become the strongest month so far this year, as news of a producers' meeting next week added to bullish sentiment driven by the threat of U.S. sanctions against OPEC-member Venezuela.
Benchmark Brent crude traded down 19 cents or .36 per cent at $52.33 a barrel at Noon ET. Brent earlier hit US$52.92 a barrel, its highest since May 25.
U.S. light crude oil traded down 40 cents or .8 per cent at US$49.31 a barrel.
U.S. crude had jumped above US$50 a barrel for the first time in two months early in the session, after U.S. officials said sanctions on Venezuela could be announced as early as Monday.
The United States is considering imposing sanctions on the country's oil sector in response to Sunday's election of a constitutional super-body, which Washington has denounced as a "sham" vote.
Even though the White House has said that "all options are on the table," the most likely action, banning Venezuela from importing U.S. oil, could come as early as Monday.
A Reuters survey on Monday indicated output from OPEC members rose, mostly from adjustments upward to Iraqi and Saudi output.
"The upward revision by 200,000 in June for OPEC-13 is quite shocking," said Commerzbank senior oil analyst Carsten Fritsch, "Compliance already slipped sharply in June to 77% (initially reported at 92%)."
However some OPEC and non-OPEC members will meet on Aug. 7-8 in Abu Dhabi to assess how the group can increase compliance with production cuts that began on Jan. 1.
Hedge funds and money managers have raised bullish bets on U.S. crude oil to their highest in three months, U.S. data showed.
In Europe, a production outage at Shell's 404,000 barrel-per-day Pernis refinery in the Netherlands following a fire sent benchmark European diesel margins, which reflect the profit made from refining crude oil into the road fuel, to their highest since November 2015 at US$14.60 a barrel.
U.S. production has hampered efforts to rebalance the market but signs the market is tightening have emerged after heavy inventory falls and slower new oil rig additions last week.
U.S. crude inventories have fallen by 10 per cent from their March peaks to 483.4 million barrels.
U.S. output dipped by 0.2 per cent to 9.41 million barrels per day (bpd) in the week to July 21, after rising by more than 10 per cent since mid-2016.
Drilling for new U.S. production is also slowing, with just 10 rigs added in July, the fewest since May 2016.