By Julia Simon
NEW YORK (Reuters) - Oil prices dipped on Tuesday as speculators took profits for a second day after big third-quarter gains, but prospects for reducing the global crude glut lent support.
Brent crude futures were down 4 cents or 0.07 percent at $55.90 a barrel at 11:24 a.m. (1624 GMT), having lost almost 2.5 percent on Monday. U.S. crude futures fell 13 cents or 0.2 percent to $50.34.
Brent notched up a third-quarter gain of about 20 percent, the biggest increase for that quarter since 2004, and traded as high as $59.49 last week, but has since fallen about 6 percent.
Money managers pushed bullish bets on the Brent crude market to a record high in the last week, encouraged by signs of rebalancing between supply and demand.
But when positioning becomes too stretched, this can lead to abrupt shifts in the price.
"It's always problematic when you have this amount of speculative length in the market," Petromatrix strategist Olivier Jakob said.
"The price action ... for me is all about positions and potentially profit-taking on some of those speculative positions."
Oil rose slightly on Tuesday following comments from OPEC Secretary-General Mohammad Barkindo that compliance with the oil output cut deal between OPEC and non-OPEC nations is extremely high. He added that the global oil cartel was looking forward to strengthening its cooperation with Russia.
Last week prices rose on tension in Iraqi Kurdistan after the region's independence vote, with Turkey threatening to close a pipeline that brings oil from the region in northern Iraq to the Mediterranean. Turkey has not carried out the threat, analysts said.
However, Middle Eastern oil producers are concerned the price rise will stir U.S. shale producers into more drilling and push prices lower again.
"Any time we get above 50 dollars a barrel drilling starts to ramp up, and that's going to bring the price of oil back down again," said Mark Watkins, regional investment manager at U.S. Bank.
He also noted that the summer driving season has come to an end, pushing down demand as autumn begins.
"Tomorrow's report we'll have to look at that data," he said, referring to the Energy Information Administration's closely watched weekly crude market report.
Offering a small boost was the expected drop in supply next month of the four largest North Sea crude grades that underpin the dated Brent benchmark.
(Additional reporting by Amanda Cooper in London; Editing by Dale Hudson and Louise Heavens)
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