Oil tumbled more than 2 percent to near $75 a barrel Tuesday on expectations U.S. fuel stocks are growing and as producer group OPEC said it was ready to meet any supply shortfalls.
Global benchmark London Brent crude settled $1.78 lower at $75.08 a barrel after trading as low as $74.85 a barrel in intraday activity. U.S. crude settled down $1.33 at $73.56 a barrel.
OPEC's second biggest producer, Iran, said the exporter group, which agreed to cut output last year as prices were sliding, would ramp up output if necessary.
"In case the oil market needs it, OPEC will inject more oil into it," the official IRNA news agency quoted Javad Yarjani, head of OPEC affairs at Iran's oil ministry, as saying.
Yarjani's comment followed similar remarks from OPEC President Mohammed al-Hamli who said Sunday the cartel is worried high oil prices may hurt the world economy.
"The fall today has been triggered by the comment from an Iranian oil official," said Olivier Jakob of oil consultancy Petromatrix. "It is the combination of other OPEC statements at the weekend, especially after OPEC had been quiet for a while."
Brent hit $78.40 last week, just off its all-time high of $78.65 last August, and the International Energy Agency has urged OPEC to increase output to boost inventories.
Expectations that the weekly U.S. government inventory report to be released on Wednesday would show a rise in refinery runs and build in product stocks also weighed on oil. U.S. refiners have struggled to keep up with summer gasoline demand due to a series of unplanned outages.
"The market is anticipating that refinery runs will be up as more refineries are going back to service, so gasoline — and with it, crude — are down today," said Andy Lebow, broker at MF Global, New York.
U.S. crude stocks are expected to have declined by 1.2 million barrels last week as refiners ramp up production, a Reuters poll of analysts showed.
Gasoline stocks are seen rising by 400,000 barrels and distillate stocks 800,000 barrels.