US oil futures fell a dollar from record highs yesterday as dealers took profits amid signals producer group OPEC could decide in June to raise its output quotas to soothe the rattled market.
Analysts said, however, that surging global fuel demand and oil's popularity with speculative hedge funds had sown doubts in the cartel's power to bring US prices much below $40 (€33.47) a barrel any time soon.
US light crude futures settled down $1.01 to $40.54 a barrel after peaking at $41.85 a barrel on Monday, the highest price since the New York Mercantile Exchange launched the contract in 1983.
London Brent crude slipped 96 cents to $36.95.
Key Gulf oil producer the United Arab Emirates (UAE) said yesterday it stands ready to boost crude output, if needed, in support of any OPEC output increase to be decided at the group's meeting on June 3rd.
Leading OPEC producer Saudi Arabia has proposed a minimum 1.5 million barrels per day (bpd) rise in OPEC's output ceiling in a bid to cool oil prices.
"We, like any producer, are interested if there is any opportunity to increase production and gain an appropriate price," Oil minister Mr Obaid al-Nasseri said. "We have no objection to seizing this opportunity."
The UAE is one of the few OPEC members with spare production capacity. The cartel, which controls half of world oil exports, is already pumping over two million bpd above its quota limits, raising questions over whether an output hike would mean additional real barrels.
High oil prices in the United States have triggered a political blame game in advance of the elections later this year, with Democratic presidential hopeful Mr John Kerry claiming President George Bush has not done enough to address soaring energy costs.
The White House has said, however, it remains in contact with major oil producers to discuss ways to cool the market. It rebuffed pressure from Democrats yesterday to open the nation's emergency oil stockpile.
US energy secretary Mr Spencer Abraham said he would meet with Saudi Oil minister Mr Ali al-Naimi later this week on the sidelines of an Amsterdam conference to discuss how to bring prices down.
OPEC member Venezuela said it opposed pressure from the US for OPEC to boost output.
Spurred in part by fears of attacks on oil terminals in the turbulent Middle East, speculative hedge funds have also bought heavily into oil markets, helping US crude surge 27 per cent .
Despite rising concern over high energy costs, acting managing director of the International Monetary Fund (IMF) Ms Anne Krueger said yesterday that oil prices were not yet in the danger area for the world economy.
