Brent net-long positions jumped for a third straight week.
Higher interest rates, political turmoil in Washington and Donald Trump’s trade war with China weighs on crude.
Don't Blame the Algos for Oil Market Swings, Economist Says
The rally represents only limited relief for oil, which is down almost 40 percent from a four-year high in October.
Crude posted the biggest gain since 2016, but the rally only restored oil to levels last seen on Monday morning.
Brent crude falls 1.1% after tumbling 6.2% in previous session.
Worries over U.S. supplies and the global economy overshadowed signals from OPEC.
Hedge funds increased wagers against rising Brent crude prices for a 10th straight week in the period that ended last Tuesday.
Group and allies agree on bigger reduction than expected.
Oil has plunged more than 30 percent from a four-year high in October on oversupply concerns.
Brent futures in London earlier fell as much as 5.2 percent. There is currently no agreement among producers to cut output.
OPEC Expected to Cut Oil Production Despite Trump, Survey Shows
Futures in New York halted a decline after slumping 7.7 percent to the lowest level in more than a year on Friday.
Traders assessed signs of rising U.S. crude inventories against the prospect of OPEC and allies cutting output.
Oil ended its 12-day run of declines amid signals that OPEC and allied producers are considering production cuts.
The plunge will push OPEC and its allies into a corner as they gather in a highly-anticipated meeting this weekend.
Oil Short-Sellers Make a Comeback as OPEC Moves to Center Stage
Futures fell 1.6 percent Thursday in New York, extending a decline from its October high to 21 percent.
Supply concerns that drove crude to a 4-year high last month faded on hopes the U.S. would soften the blow of its Iran sanctions.
It's the Iranian Oil Guessing Game. And the Bears Are Winning
Futures in New York are poised for a 9.3 percent drop this month, ending two months of gains.