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Oil pares losses on report of likely Opec output cap deal

[NEW YORK] Oil prices were down slightly on Wednesday, paring sharp early losses after Opec sources said the group was likely to consider a new output ceiling at its forthcoming meeting, although many in the market still appeared skeptical about such a deal.

Brent crude futures were down 35 cents, or 0.7 per cent, at US$49.54 per barrel by 11:29 am EDT (1529 GMT), after striking an intraday low at US$48.65.

US crude's West Texas Intermediate (WTI) futures showed a 40 cent decline at US$48.70, after plumbing to US$47.75 earlier.

Reuters cited four Opec sources as saying the Organization of the Petroleum Exporting Countries was likely to consider a production cap at its Thursday meeting.

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An earlier report on Wednesday said Gulf OPEC members, including Saudi Arabia, were considering reviving the idea of coordinated oil output action by major producers, a senior Opec source said.

Market participants have doubted such a deal was likely. Iran, a key Opec member, has said it was determined to restore its crude exports to pre-sanction levels. Analysts had said the meeting on Thursday was likely focus on defending market share of individual Opec members.