By Alison Sider and Kevin Baxter 

Oil prices fell on Tuesday after failing to break out of the recent trading corridor amid creeping U.S. production growth and falling prices for gasoline and diesel.

U.S. crude futures fell 56 cents, or 1.04%, to $53.49 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 54 cents, or 0.97%, to $55.39 a barrel on ICE Futures Europe.

February has been the "dullest" month for oil prices since 2003, analysts at Mizuho wrote Tuesday, with crude futures trading in a $3.72 range.

Even as oil prices have remained wedged in a narrow band, investors have piled into a record number of bets that prices will rise, and many are anticipating that oil's next big move will be upward, especially if OPEC and other major exporters agree to extend their production-cut agreement.

"The guessing game is in full swing as which direction oil prices will break out of their current range. It is fair to say the voice of those who are expecting higher prices in the coming months is louder than that of their rivals," the brokerage PVM wrote in a note Tuesday.

But the large number of bullish bets presents its own risks to prices, analysts said.

"The high degree of speculative interest is hanging over oil prices like the sword of Damocles," analysts at German's Commerzbank said Tuesday. "If financial investors were to unwind their positions, a sharp fall in prices would be on the cards."

Rising U.S. oil production is the likely culprit limiting price increases on concerns that shale oil players are become ever more efficient and are now eyeing the lucrative foreign export market.

Citi Futures forecasts U.S. crude stocks grew by 3 million barrels for the week ended Feb. 24.

If confirmed by the U.S. Department of Energy on Wednesday, the build would be far below the 10.4 million barrels seen in the same week last year, but "still enough to remind the market that inventories are in a seasonal uptrend that could have another two months to run."

For now, many commodities traders are awaiting U.S. President Donald Trump's speech to Congress Tuesday evening in Washington, D.C. He is expected to touch on plans for overhauling the tax code, boosting defense spending, and revamping the health insurance system.

Gasoline futures fell 3.78 cents, or 2.47%, to $1.4949 a gallon. Diesel futures fell 3.33 cents, or 2.03%, to $1.6066 a gallon.

--Jenny W. Hsu contributed to this article.

Write to Alison Sider at alison.sider@wsj.com and Kevin Baxter at Kevin.Baxter@wsj.com

(END) Dow Jones Newswires

February 28, 2017 11:01 ET (16:01 GMT)

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