Saudi Arabia’s conventional approach to market management is no longer working: crude has fallen back below $50 a barrel, US shale oil output is again on the rise and Saudi-led Opec, if anything, is worse off than when it agreed the supply deal back in November, having cut volumes for little upside on price.

U.S. crude CLcv1 rose 2.09 percent to $46.47 per barrel and Brent LCOcv1 was last at $49.45, up 2.21 percent on the day.

"The good news is that the market is moving towards rebalancing," Saudi Aramco CEO Amin Nasser said at the International Oil Summit in Paris last week. "There has also been a rapid drawdown of floating storage in the first quarter of this year. This is being driven by improving fundamentals and the OPEC deal."

OPEC's largest producer Saudi Arabia averaged 9.97 million b/d in April, according to the survey, below its quota under the deal of 10.058 million b/d.

U.S. crude CLc1 fell $2.05 or 4.3 percent to $45.77, by 12:08 p.m. Brent was down $2.07, or 4.1 percent to $48.71.

OPEC and non-OPEC oil producers look likely to extend their agreement to limit supplies beyond its June expiry to help clear a glut, three OPEC delegates said on Thursday, downplaying the chance of additional steps such as a bigger cut.

Saudi Arabia, the world’s largest crude exporter, cut pricing for June oil exports to Asia as it fights to defend sales in its biggest regional market. The kingdom raised pricing to all other regions.

IEA - This sharp slowdown in activity in the conventional oil sector was the result of reduced investment spending driven by low oil prices. It brings an additional cause of concern for global energy security at a time of heightened geopolitical risks in some major producer countries.

NYMEX crude for June delivery CLc1 was down 12 cents at $49.21 a barrel by 0619 GMT. London Brent crude for new front-month delivery in July LCOc1 was down 15 cents at $51.90.

U.S. West Texas Intermediate (WTI) crude oil futures were trading at $49.37 per barrel at 0644 GMT, down 25 cents, or 0.5 percent from their last close. WTI has lost around 8.5 percent in value from its April peak. Brent crude futures, the international benchmark for oil prices, were at $51.63 per barrel, down 19 cents, or 0.37 percent. Brent is almost 9 percent below its April peak.