Oil prices held steady below $54 a barrel today, waiting for weekly US data to show whether swollen crude inventories rise again and if thinner distillate stocks build a bigger cushion against winter demand.
US light sweet crude traded down 3 cents to $53.73 a barrel in midday Asian dealing, taking losses so far this week to 2.3 per cent.
Prices hit a six-week high of $55.55 last Thursday. London Brent crude was 8 cents lower at $53.05 a barrel.
Oil has roared higher since mid-May as speculators bet that refiners may struggle to produce enough distillates - such as heating oil and diesel - to satisfy demand this winter.
A global refining capacity crunch has pushed US distillate inventories into the lower half of their seasonal range while causing crude stocks to build to six-year highs.
Commercial crude inventories were forecast to have built a mild 200,000 barrels last week as higher refinery use helped eat up higher imports from booming OPEC producers.
But analysts say stockpiles should begin to ebb as economics encourage refiners to favour production of distillates such as heating oil, now priced at an unseasonal premium to gasoline, the prime driver of summertime demand.
With prices stubbornly above $50 a barrel, despite high inventory levels, the Organization of the Petroleum Exporting Countries (OPEC) will consider increasing its official ceiling when it meets in Vienna next week, officials said.
"If the price will continue as it is now I will propose as president to increase by 500,000 (barrels per day) for the ceiling," OPEC President Sheikh Ahmad al-Fahd al-Sabah said.
That would put the cartel's ceiling for the 10 countries bound by quotas at 28 million barrels per day, about what they are pumping now, meaning actual output would be unchanged.