Oil prices simmered near recent peaks today as leading world producer Saudi Arabia raised crude exports to feed Asian-led global demand growth.
May crude on the New York Mercantile Exchange fell 34 cents to $37.50 a barrel after jumping 70 cents on Monday. London Brent crude, which was closed yesterday, rose 19 cents to $33.53 a barrel.
US crude is now back within 70 cents of a 13-year closing high above $38 struck last month. Fears that rising violence in Iraq could threaten oil supplies and low U.S. gasoline inventories heading into peak summer holiday demand have helped fuel a rise of three dollars, or nine percent since the start of April.
As prices surge, top OPEC producer Saudi Arabia has increased supply to both Asian and European customers by as much as 12 percentage points versus April volumes.
Asia absorbs around half of Saudi Arabia's more than five million barrels per day (bpd) crude exports, while Europe takes about 20 percent of the kingdom's supplies.
Industry sources said a heavy second quarter maintenance schedule at Saudi refineries had freed up more crude for export.
Even so, the move has strengthened doubts over how strictly OPEC producers will enforce a pledge late last month to reduce output by one million barrels per day (bpd), or four per cent, from April 1st.