World oil prices have extended their losses as Iraq restored oil exports and hedge funds continued to take profits from record highs.
US light crude settled down 16 cents to $42.12 a barrel after falling as low as $41.45, nearly $8 below record highs of $49.40 hit on August 20th.
London Brent crude settled down 99 cents to $39.61 a barrel after dropping as low as $39.20, the lowest in a month.
"Funds are being forced out but many of them still have deep long positions," said brokers Refco of the investment funds who helped spur US crude to the August 20th record.
Exports of southern Iraqi Basra crude ran near full capacity at 1.7 million barrels a day after repairs following sabotage attacks and the first shipment for three months of northern Iraqi Kirkuk crude was loading at Turkey's export terminal, Ceyhan.
OPEC president Mr Purnomo Yusgiantoro said on Monday the group which controls more than half of world exports aimed to increase spare output capacity by about one million barrels per day (bpd) in the next few months.
OPEC is already pumping close to 30 million bpd, its highest level since 1979. Only Saudi Arabia has any significant spare capacity within the 11-member cartel, which is due to meet on September 15th.
Weekly US government inventory data due on Wednesday are forecast in a Reuters poll to show an average increase of 1.2 million barrels in crude stocks in the week to August 20th on heavy imports.
