Oil prices fell on Tuesday on expectations of another rise in U.S. stockpiles and as Saudi Arabia keeps output near record highs, but prices remained near a 2015 peak reached last week.
Crude prices have climbed around 16 percent since the start of April due to mounting concern over conflict in Yemen, with the U.S. navy saying on Monday it had sent an aircraft carrier and a guided-missile cruiser into waters near the country.
Prices have also been supported by speculation about falling U.S. output after the domestic oil rig count hit 2010 lows.
Still, U.S. commercial crude oil inventories are forecast to have increased by 2.4 million barrels last week, rising for the 15th consecutive week, a preliminary Reuters survey showed. <EIA/S>
Brent crude for June delivery LCOc1 was down 47 cents at $62.98 a barrel by 0706 GMT, after settling flat on Monday.
U.S. crude for May delivery CLc1, which expires later in the day, was down 54 cents at $55.84 a barrel, after settling 64 cents higher.
U.S. Senator Lisa Murkowski said on Monday she would introduce legislation this year to allow U.S. crude exports, saying the Obama administration should not dare lift sanctions on Iran before scrapping the U.S. crude export ban.
Saudi Oil Minister Ali al-Naimi told Reuters in Seoul that the No. 1 crude exporter expected to produce at near record highs of around 10 million bpd in April.
Analysts warn that OPEC’s ability to cope with an unexpected surge in demand is diminishing fast.
“If the demand and non-OPEC supply responses to lower prices are similar to what was experienced in the 1980s, the very low level of spare capacity carries a risk of a price spike in the not too distant future,” said analysts at PIRA Energy.
OPEC’s spare capacity could halve to as low as 1.7 million barrels per day (bpd) this year, far below the level of more than 10 million bpd in the 1980s, when Saudi Arabia last opted for market share over price.