Oil price rally tested by shale expectations

"Synchronized global growth, robust demand for oil, high compliance [with an OPEC deal] and geopolitical risks provide support [for crude oil prices]," Ole Hanson, the head of commodity strategy at Saxo Bank, said in an emailed market report. "Capping the upside for now are... concerns that current prices could accelerate non-OPEC production further."

Saudi Arabia, the de facto head of the Organization of Petroleum Exporting Countries, has continued to roll out a "whatever it takes" platform for balancing a market tilted slightly toward the supply side. OPEC and a handful of producers outside the group, like Russia, are coordinating to drain the surplus on the five-year average in global crude oil through managed declines in production.

OPEC during the weekend said compliance with the agreement was above 100 percent. OPEC economists in their monthly market report for October said the price for West Texas Intermediate, the U.S. benchmark for the price of oil, could be in a range between $50 per barrel and $55 per barrel for 2018. Another above that would trigger an uptick in U.S. drilling, and possibly contribute to later supply-side strains.

The price for Brent crude oil was down 0.17 percent at 9:15 a.m. EDT to $58.23 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.59 percent to $52.16 per barrel.

"The threat of an even bigger response from U.S. shale oil producers following WTI's return above $50 per barrel is likely to cap the upside for now," Hanson said.

His comments came after the U.S. Interior Department announced plans to hold what it said was the largest offshore lease sale in its history as an oil and gas producer. The government estimates the lease area holds as much as 1.1 billion barrels of oil and 4.4 trillion cubic feet of natural gas.

The American Petroleum Institute reported late Tuesday that crude oil inventories in the United States, the world's largest economy, declined by 519,000 barrels. A survey of analysts from commodity pricing group S&P Global Platts forecast a draw on crude oil inventories of 425,000 barrels

The trajectory for crude oil prices will be determined later in the morning when the U.S. Energy Information Administration publishes official government data. Figures less than the API's estimate would likely send crude oil prices into negative territory.