US oil prices fell on today on growing confidence that OPEC would boost output limits on August 1st and after Kuwait said the producers' group may consider more supply increases if the market remained strong.
US light crude dropped 33 cents to $39.63 a barrel, after initially losing up to one per cent from Friday.
Kuwait and Algeria said at the weekend the OPEC would proceed with a planned 500,000 barrel-per-day (bpd) rise in official supply limits from next month even though ministers are due to review production policy in Vienna on July 21st.
Yet, price hawk Venezuela said on Saturday the plan to raise output in August had to be evaluated and OPEC would make a final decision at the July meeting.
Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said OPEC would consider further output increases and would discuss spare capacity among members at the end-July talks.
Oil prices jumped to $40 a barrel again last week on nagging fears of supply disruptions in Iraq, Nigeria and Russia, where the biggest producer, Yukos, faces possible bankruptcy.