LONDON (Reuters) -Oil eased but stayed in sight of $60 on Tuesday after leading OPEC producer Saudi Arabia held out the prospect of deeper output cuts to remove excess supply.
Prices rose 88 cents on Monday after Saudi Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries would take action when it meets on December 14 if world markets remained imbalanced.
U.S. crude was off 11 cents at $59.91 a barrel by 1042 GMT. London Brent was down 11 cents at $59.64.
Naimi, oil minister of the world’s top exporter, noted “very high” stockpiles of fuel worldwide.
Analysts echoed his view.
“The immediate oil inventory levels are not well balanced. U.S. supplies are ample,” said Tony Nunan, a manager at Mitsubishi Corp.’s risk management unit.
“The market is still in the range between $57 and $61. When it rises, heavy inventories pull down prices.”
OPEC’s second biggest producer, Iran, said on Tuesday that if prices stabilized, there would be no need for the group to make a further cut next month.
Led by top exporter Saudi Arabia, OPEC members are enforcing a 1.2 million barrels per day cut agreed last month in an attempt to halt a 25 percent slide in prices since mid-July.
Some analysts say OPEC may need to make a sizeable reduction when its meets on December 14 to counter brimming stockpiles, especially in the United States, the world’s biggest consumer.
Inventory data from the United States, to be released on Wednesday, is likely to show crude stockpiles rose a modest 500,000 barrels last week, a preliminary Reuters poll of industry analysts showed .
Losses on Tuesday were also limited after an attack on Monday at an oil facility at Tebidaba, southern Nigeria.
This followed a rally on Friday, when the U.S. consulate in Nigeria warned militants may have plans to launch attacks on oil facilities in the world’s eighth-largest exporter.
But investors may have bought up the market too hastily.
“This is a typical case of knee-jerk over-reaction leading to a price correction,” Antoine Halff, an analyst in energy research at Fimat USA, said in a research note.
Longer term, consumers face ever higher oil prices as investment in new supply lags growing demand, the International Energy Agency said on Tuesday.
A barrel of crude may cost $57.79 in 2010, up from $40 expected last year, the IEA said in its World Energy Outlook.
The price may hit $97.30 in 2030, up from $65 expected last year. It may even reach $130.30 if investment falls short.