Oil slipped below $58 a barrel on Tuesday, extending a $2 slide from the previous day on signs that OPEC will refrain from further oil supply cuts when it meets in March, Reuters reports.
The International Energy Agency said in a monthly report the world market would tighten markedly if the Organization of the Petroleum Exporting Countries cut beyond its existing 1.7 million barrels per day reduction.
U.S. crude was off 23 cents at $57.58 a barrel at 1033, after sliding $2.08 or nearly 3.5 percent on Monday. London Brent crude slipped 12 cents to $56.48 a barrel.
OPEC ministers, including influential Saudi Oil Minister Ali al-Naimi, have signalled that further supply cuts would probably not be needed when the group meets on March 17 in Vienna.
"OPEC is not likely to cut production so it would be difficult to see a big gain in oil prices," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures Ltd.
Trade sources said Saudi Arabia, the world's top crude exporter, will keep supplies steady to global oil majors in March, though Japanese refiners confirmed on Tuesday the kingdom will lift March supplies to Asia.
The IEA, which advises 26 industrialized nations, noted that OPEC curbs had helped drain stockpiles in major consuming countries of 40.2 million barrels in December and that downward trend continued in January.
This month could see more inventory declines, with stocks of heating fuel in top consumer the United States expected to drain further after a recent cold spell stoked demand.