Analysts said the market will remain sensitive to comments from officials attending a technical meeting of the Organization of the Petroleum Exporting Countries (OPEC), which was trying to hammer out the details of an agreement before the formal meeting on Nov. 30.

Brent futures LCOc1 were down 41 cents, or 0.8 percent, at $48.49 a barrel at 12:34 p.m. EST (1734 GMT). U.S. crude CLc1 fell 77 cents, or 1.6 percent, to $47.47 per barrel. Brent came within 4 cents of $50 earlier in the session, its highest since Oct. 28.

The premium of U.S. futures for the second month CLc2 over the front-month CL-1=R, meanwhile, climbed to 95 cents, its highest since April, as OPEC rhetoric boosts later dated crude contracts.

Prices slumped after OPEC sources said agreement to a 4.0-4.5 percent output cut by all 14 members aside from Libya and Nigeria would still hinge next week on the backing of Iran and Iraq.

"The hope was OPEC would have an announcement on a production cut on Tuesday and they don't have one yet," Phil Flynn, analyst at Chicago-based brokerage Price Futures Group, said, noting there are reports the cartel would defer a decision on a deal until the Nov. 30 meeting due to the opposition of Iran and Iraq.

Prices on Tuesday were initially boosted by comments from a Nigerian official attending the OPEC technical meeting that it was likely all countries would be "on board" by the end of the day.

OPEC is trying to bring its members and non-OPEC producer Russia to agree on a coordinated cut to prop up the market, beset by a two-year glut in supplies, by bringing production into line with consumption.

It said at the end of September it aimed to cut production to between 32.5 million and 33 million barrels per day compared with its recent record output of around 33.8 million bpd.

While a ceiling for overall OPEC production may be agreed by Nov. 30, it is unclear whether clear quotas per member state would be set. Some countries, such as Nigeria, Iraq, Libya and Iran, argue they should be exempt because their output has been hit by conflict or sanctions.

"Ultimately, it looks as if Saudi Arabia and its allied Gulf neighbors will reduce production on their own," analysts at Commerzbank said.

"No ground-breaking agreement on production caps or cuts should be expected from the OPEC meeting. The oil market is likely to remain oversupplied for some time yet even after the OPEC meeting, especially since U.S. oil production will soon start rising again."

U.S. commercial crude oil inventories were forecast to have risen for a fourth consecutive week, gaining 700,000 barrels last week, ahead of data from the American Petroleum Institute at 4:30 p.m. EST (2130 GMT).