Oil edged lower towards $77 a barrel on Monday, with the market keenly watching the actions of funds after OPEC expressed concern over near record prices and pledged to pump more crude if needed.
OPEC President and United Arab Emirates Energy Minister Mohammed al-Hamli said on Sunday that oil's strength was a worry but the world economy was still growing in spite of it.
London Brent crude, now more reflective of global prices than U.S. oil, slid 29 cents to $77.35 a barrel by 1146 GMT, off lows of $76.91. It hit $78.40 last week, just shy of its all-time high of $78.65 hit last August. U.S. crude traded 44 cents lower at $75.35.
"The statement is important ... as it could be the first indication that OPEC may be willing to consider easing up on its supply allocations at its September meeting, and could be accounting for the softer opening we are seeing so far today," a Man Financial report said.
Analysts said oil was also pulled lower by a report citing the head of OPEC's research division saying a fair price for producers and consumers would be around $60-$65.
Consumer governments have called repeatedly on the Organization of the Petroleum Exporting Countries to boost output to ease high prices. But OPEC has resisted so far, saying crude supplies are more than ample.
"If we see there is a need for more oil, we will supply more. But if we supply more now, it will go straight to stocks," the OPEC chief told Reuters.
"Whether we are going to have to change by the end of the year, I don't know."
(Reuters, 23/07/2007)