Oil fell for a second day after Iran said it would not halt exports because of a dispute over the country's nuclear program and on speculation US stockpiles rose last week.
Iran, the world's fourth-biggest oil exporter, has "no reason to stop" overseas sales, even if the disagreement is discussed by the UN Security Council, Kazem Vaziri-Hamaneh, the nation's oil minister, told reporters on Tuesday in Vienna. US inventories probably rose 1 million barrels, according to the median of forecasts by 14 analysts.
"Iran has separated the nuclear issue from the oil-export issue and seems to have ruled out retaliatory action," said David Thurtell, commodity strategist at Commonwealth Bank of Australia in Sydney.
"That may change, but what they're saying now should be having some soothing impact on the market," he said.
Crude oil for March delivery fell as much as US$0.42, or 0.6 percent, to US$67.50 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at US$67.55 a barrel at 4:18pm Singapore time.
On Tuesday, oil fell US$0.43, or 0.6 percent, to US$67.92.
Prices reached a record US$70.85 a barrel on Aug. 30, the day after Hurricane Katrina made landfall in Louisiana and Mississippi, slashing output at platforms in the Gulf of Mexico.
Oil is up 43 percent from a year ago.
The International Atomic Energy Agency is meeting in Vienna today to discuss whether to refer Iran's nuclear program to the UN Security Council for possible sanctions. Iran resumed work on uranium enrichment last month amid EU and US objections. Russia and China agreed to back the referral.
Iran won't "submit to bullying" by "fake superpowers" over the development of nuclear power, which is the Middle East nation's "undeniable right," President Mahmoud Ahmadinejad said in a speech to supporters on state television yesterday.
Iran produced 3.9 million barrels of crude oil a day in December, almost 5 percent of global output, according to Bloomberg figures.
"We are not mixing politics with the economic decision on this issue," Vaziri-Hamaneh said.
The OPEC will maintain current production until it meets again in March, Saudi Arabian Oil Minister Ali al-Naimi said on Tuesday. Growing demand has left insufficient spare capacity to make up for the possible loss of Iranian shipments.
"Why do otherwise?" al-Naimi, told reporters in Vienna.
"There's no justification" for a cut, he said, adding that the decision to hold output steady was unanimous.
Some OPEC ministers, including those from Libya and Venezuela, said a production cut of between 500,000 barrels and 1 million barrels a day, effective April 1, might be needed when OPEC meets next on March 8.
"OPEC would like to see lower prices and is doing what it can," said John Kilduff, vice president of risk management at Fimat USA in New York. "The OPEC ministers left open the prospect of a rollback in quotas at the March meeting."
The 11-member group, which produces about 40 percent of the world's crude, typically cuts production in the second quarter, anticipating a decline in demand as the weather turns warmer in the Northern Hemisphere.
"It was no surprise that OPEC came out and said `no change' to supply," Commonwealth Bank's Thurtell said.
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