LONDON, Nov 7 (Reuters) Oil eased but stayed in sight of on Tuesday after leading OPEC producer Saudi Arabia held out the possibility of a deeper output cut to remove excess supply.
Prices rose 88 cents on Monday after Saudi Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries would take action when it meets on Dec. 14 if world markets were still imbalanced.
OPEC's second biggest producer, Iran, said on Tuesday that if prices stabilised, there would be no need for the group to make a further cut next month.
U.S. crude was off 29 cents at .73 a barrel by 0946 GMT.
London Brent was down 28 cents at .47.
''The immediate oil inventory levels are not well balanced.
U.S. supplies are ample,'' said Tony Nunan, a manager at Mitsubishi Corp.'s risk management unit.
''The market is still in the range between and . When it rises, heavy inventories pull down prices.'' OPEC may need to make another sizeable reduction when its meets on Dec. 14 to counter brimming stockpiles, especially in the United States, traders said.
Inventory data from the United States, the world's biggest energy consumer, to be released on Wednesday, is likely to show crude stockpiles rose a modest 500,000 barrels last week, a preliminary Reuters poll of industry analysts showed.
Led by top exporter Saudi Arabia, OPEC members are enforcing a 1.2 million barrels per day cut agreed last month in an attempt to halt a 25 percent slide in prices since mid-July.
Losses on Tuesday were also limited after an attack on Monday at an oil production facility at Tebidaba, southern Nigeria.
This followed a rally on Friday, when the U.S. consulate in Nigeria warned that militants might have imminent plans to launch attacks on oil facilities in the world's eighth-largest exporter.
Analysts said the market might have been overbought.
''This is a typical case of knee-jerk over-reaction leading to a price correction,'' Antoine Halff, an analyst in energy research at Fimat USA, said in a research note.
REUTERS SBA DS1616
Prices rose 88 cents on Monday after Saudi Oil Minister Ali al-Naimi said the Organization of the Petroleum Exporting Countries would take action when it meets on Dec. 14 if world markets were still imbalanced.
OPEC's second biggest producer, Iran, said on Tuesday that if prices stabilised, there would be no need for the group to make a further cut next month.
U.S. crude was off 29 cents at .73 a barrel by 0946 GMT.
London Brent was down 28 cents at .47.
''The immediate oil inventory levels are not well balanced.
U.S. supplies are ample,'' said Tony Nunan, a manager at Mitsubishi Corp.'s risk management unit.
''The market is still in the range between and . When it rises, heavy inventories pull down prices.'' OPEC may need to make another sizeable reduction when its meets on Dec. 14 to counter brimming stockpiles, especially in the United States, traders said.
Inventory data from the United States, the world's biggest energy consumer, to be released on Wednesday, is likely to show crude stockpiles rose a modest 500,000 barrels last week, a preliminary Reuters poll of industry analysts showed.
Led by top exporter Saudi Arabia, OPEC members are enforcing a 1.2 million barrels per day cut agreed last month in an attempt to halt a 25 percent slide in prices since mid-July.
Losses on Tuesday were also limited after an attack on Monday at an oil production facility at Tebidaba, southern Nigeria.
This followed a rally on Friday, when the U.S. consulate in Nigeria warned that militants might have imminent plans to launch attacks on oil facilities in the world's eighth-largest exporter.
Analysts said the market might have been overbought.
''This is a typical case of knee-jerk over-reaction leading to a price correction,'' Antoine Halff, an analyst in energy research at Fimat USA, said in a research note.
REUTERS SBA DS1616
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