International Brent crude oil futures fell below $60 per barrel early in the session, trading at $59.50 per barrel at 0144 GMT, down 56 cents, or 0.9 percent from their last close.
However, the U.S. then granted temporary waivers to eight allies to allow them to carry on importing Iranian oil, contributing to a plunge in oil prices which wiped out the gains seen since early 2017.
"No, I am not confident" about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of negotiations at OPEC's headquarters in Vienna.
The thorny question of exemptions, which will also be sought by Venezuela and Libya according to the Bloomberg news agency, could be crucial for Friday's talks.
Oil producers have been hit by a 30-percent plunge in crude prices since October as supply surges just as the demand outlook weakens amid a global economic slowdown.
"We assume key OPEC producers - Saudi Arabia, the United Arab Emirates and Kuwait - together with Russian Federation and Oman, will push through a moderate reduction in output in place through 2019", Wood Mackenzie vice president of macro oil Anne-Louise Hittle said.
The Energy Information Administration said the U.S. exported 3.2 millions barrels of oil during the week, and more than 5.8 million barrels of other refined products.
Led by Saudi Arabia, OPEC's crude oil production PRODN-TOTAL has risen by 4.1 percent since mid-2018, to 33.31 million bpd.
"Reversing the overwhelmingly bearish price sentiment will likely require a credible and cohesive message from the OPEC meeting", US investment bank Jefferies said, adding that 1 million bpd would not be enough.
Oil output from the world's biggest producers - OPEC, Russia and the United States - has increased by 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting nearly 60 percent of global consumption.
The surge is mainly due to soaring US oil production (C-OUT-T-EIA), which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the world's biggest producer.