NEW YORK - Oil prices slipped on Tuesday, ending a five-day streak of gains, as expectations of an increase in already-robust US stockpiles countered worries of an Opec supply cut this spring.
Light crude futures on the New York Mercantile Exchange eased 18 cents to US$47.26 a barrel, while Brent crude on London's International Petroleum Exchange softened 14 cents to US$45.39.
The slight losses came ahead of the US government's weekly inventory report, to be released early Wednesday, which dealers expected would show oil supplies rose 1 million barrels last week due to higher imports.
Stockpiles in the world's largest energy consumer are already about 8 per cent higher than they were last year, according to the last report from the US Energy Information Administration.
US oil prices have held within a US$45-US$50 range since early January, but had been on the uptick for more than a week on projections of a continued tight market in 2005 and signals of another output cut from the Organisation of the Petroleum Exporting Countries.
The International Energy Agency, which advises industrialised nations on energy policy, issued an outlook last week expecting stronger demand growth and lower non-Opec supply this year.
Opec's warning of a possible pre-emptive production cut ahead of the cartel's March 16 meeting has also kept traders cautious, particularly with some producers pointing to a new, higher price floor of US$40 a barrel for US crude.
"Opec keeps out there the potential for a production cut, which keeps the market well-supported," said John Brady at ABN AMRO in New York.
Venezuelan energy minister Rafael Ramirez said on Monday it was too early for Opec to decide whether it needed to adjust production levels at its next meeting.
Opec's acting Secretary-General Adnan Shihab-Eldin has said the oil cartel might need to cut supply for the second quarter even if consumption stayed robust and would need a faster, bigger cut if demand were to fall sharply.
On the supply side, Iraq has resumed its northern oil exports after flows were halted by attacks since mid-December, industry sources said on Monday.
And the president of Russian pipeline monopoly Transneft said on Tuesday the country's oil production should grow by 5-6 per cent this year and is likely to top out soon after that.
"Beyond 2005 we will probably reach the ceiling in output, " he said. "The period of easy oil extraction is over and to boost output further we need serious capital investment and more time," he said.