Oil prices eased for a second day today as traders booked profits from a week-long rise after Saudi Arabia said it could quickly tap spare oil production capacity if necessary.
US light crude last traded down 31 cents to $54.26 a barrel, extending yesterday's 82-cent loss in New York. London Brent crude was down 9 cents to $54.31.
Prices were dampened by renewed signs of rising OPEC supply and comments from the world's leading exporter, Saudi Arabia, that it was ready to tap spare capacity if buyers needed more oil.
OPEC oil producers are pumping 30.4 million barrels per day (bpd) in April, up 700,000 bpd from March, leading tanker tracking consultancy Petrologistics said on Tuesday.
Mr Adel al-Jubeir, foreign affairs adviser to Saudi Arabia's Crown Prince Abdullah, said after a meeting between US President George W. Bush in Texas that world oil supplies were adequate, but the kingdom was willing to provide as much crude oil as buyers wanted.
The kingdom is producing slightly over 9.5 million bpd, with between 1.3 million and 1.4 million bpd in spare production capacity that could quickly be tapped, he said.
Although many analysts see sufficient supplies of crude oil and products in the short term, they remain wary about constraints on global refining capacity and a possible shortage of products later in the year.