Demand in North America is set to pick up along with the official start of the US summer driving season this week, triggering a cut in the amount of open short crude positions that would profit from falling prices.

"Investor positioning points to further support for commodity prices as bearish bets continue to be reduced," ANZ bank said on Tuesday.

The amount of outstanding managed short crude positions of US WTI crude futures fell to its lowest level this year last week.

International oil markets, however, were hit by a rise in Middle Eastern crude exports, most of which go to Asia.

Brent crude futures were trading at $49.65 a barrel, down 11 cents from their last close.

Iraq will supply 5 million barrels of extra crude to its partners in June,industry sources familiar with the issue said, joining other Middle East producers by lifting market share ahead of an Opec meeting this week.

Iraq, which is the second-largest Opec producer, had already been targeting record crude export volumes from southern terminals next month of 3.47 million barrels per day.

Saudi Arabia, the world's top crude exporter, as well as fellow Opec producers Kuwait, Iran and the United Arab Emirates, also plan to raise supplies in the third quarter in an ongoing race for market share in the world's biggest consumer region,Asia.