Oil prices hovered over $41 a barrel today, just below record highs, on nagging worries that Saudi Arabia's promised output boost would be insufficient to meet spiralling global demand or replenish low US gasoline supplies.
After yesterday's $1.79 surge on US crude oil, prices edged 33 cents lower to $41.39 a barrel today. They are less than 50 cents away from a record 21-year high for the futures contract reached last week.
European benchmark Brent traded 47 cents lower at $37.70 a barrel, having surged more than $1.60 yesterday.
The world's top exporter Saudi Arabia managed to knock prices slightly lower on Friday when it said it was boosting its own production by 10 per cent to 9.1 million barrels per day (bpd), without waiting for an OPEC decision to lift limits.
Saudi Oil Minister Ali al-Naimi also said the kingdom could lift output to 10.5 million bpd within one week if demand warranted.
But the unilateral move appeared to upset some members of the cartel, who are not willing to endorse Saudi's plan to legitimise current cartel leakage by lifting the official ceiling by 2 to 2.5 million bpd.
That uncertainty has fired up an already jittery oil market, on edge over possible supply disruptions from the Middle East after repeated assaults on Iraq's oil infrastructure and political tensions.
The world's biggest oil consuming nations have intensified their calls for OPEC to lift output in order to cool prices, but producers say there's little else they can do.
With global crude oil production now stretched to near capacity after an unexpectedly strong second quarter, the slightest hiccup in the supply chain can spook the market, traders say.