Oil prices eased off their record highs Tuesday, but stayed close to the $60 threshold on persistent global supply fears as the market once more brushed aside another OPEC (search) pledge to add barrels.
Traders were also watching the Department of Energy (search) petroleum data snapshot to be released Wednesday for consumption clues and a threatened strike in Norway that could knock a million barrels off the supply chain from the world's No. 3 exporter.
"With worries about OPEC's limited spare capacity, it doesn't really matter whether we see problems emerging in Nigeria or Norway, even the slightest fear will keep the bear out of the market," said Orrin Middleton, an energy analyst at Barclays Capital in London.
"What seems to preoccupy people most is at what stage prices will break the $60 threshold," Middleton said.
Light, sweet crude for July delivery fell 47 cents to $58.90 a barrel in afternoon trading on the New York Mercantile Exchange (search) ahead of the contract's expiration later Tuesday.
Prices had climbed 90 cents to settle at $59.37 a barrel on Monday, a record close on the Nymex, where oil futures have been traded since 1983.
Heating oil futures fell 1.18 cent to $1.65 a gallon on Nymex, while gasoline futures were down less than a penny at $1.6425 a gallon.
On London's International Petroleum Exchange, Brent crude for August delivery was down 20 cents to $58.12 after the contract set a new high of $58.58 on Monday.
On Wednesday, the U.S. releases its midweek petroleum stocks report, a key market mover.
While Nymex oil futures are more than 50 percent higher than a year ago, they are still below the inflation-adjusted high above US$90 a barrel set in 1980.
Sheik Ahmed Fahd Al Ahmed Al Sabah, president of the Organization of Petroleum Exporting Countries, said Monday he would consult cartel members to raise the group's production quota another half million barrels if prices remained at these levels at the end of the week.
Last week the oil cartel agreed to raise its official production ceiling to 28 million barrels, starting July 1, but that failed to soothe traders because OPEC's output is already exceeding that level as producers seek to cash in on high prices. Including Iraq, which is not bound by the quota system, OPEC is pumping close to 30 million barrels a day, or about 35 percent of global demand.
Supply fears and limited excess capacity have been a major driving force in pushing prices upward all year.
A defective lifeboat forced the partial evacuation of a Norwegian offshore oil platform Tuesday, shutting down its 30,000 barrels per day production. The shutdown also affects a linked platform with a capacity of 8,000 barrels per day plus natural gas that was to be restarted Tuesday after a maintenance shutdown.
The unplanned stop comes hours before a strike threatened at most of Statoil's fields unless a contract settlement is reached before Wednesday.
A strike could cut Norway's production by nearly 1 million barrels per day.