Oil steadied above $62 on Friday as burgeoning U.S. inventories and slower-than-expected economic growth balanced possible action from some OPEC producers to trim output to halt the decline in prices.
U.S. crude shed 16 cents to $62.60 a barrel by 0603 GMT, easing from Thursday's midsession rally of $64.00. London Brent crude lost 15 cents to $62.39.
There is obviously enough oil flowing in the market. The inventories are at a very comfortable level and capacity has come back a notch, so the judgment is that there is more than enough supply, said Tobin Gorey at the Commonwealth Bank of Australia.
The world's eighth-largest exporter Nigeria will cut supplies by 5 percent from October 1 after consultations with other OPEC producers, while some other countries in the exporters' club have already trimmed sales, acting Secretary-General Mohammed Barkindo told Reuters on Thursday.
A senior Nigerian oil industry source told Reuters that Nigeria was joining Saudi Arabia, the world's biggest oil exporter, and Kuwait in an unofficial deal to pare oil supply.
A Gulf oil source said Kuwait's oil production was steady and there had been no order yet to cut supply. Saudi oil officials could not be reached for immediate comment.
Edmund Daukoru, OPEC's president, told Reuters earlier this week that something needed to be done to steady prices, but Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said on Wednesday that with U.S. crude above $61, most OPEC ministers were content with prices and not inclined now to cut output.
Oil in New York has lost about 20 percent from a July peak of $78.40, the steepest drop since the 1991 Gulf War.
Although some OPEC members have been flagging that the cartel would trim output, the market has been dominated by a string of bearish data, limiting the impact of OPEC's rumblings.
NYMEX gasoline for October led oil complex losses on Thursday, falling 3.88 cents or 2.5 percent after U.S. government data showed a bigger-than-forecast build in gasoline stocks a day earlier.
The recent spate of weak economic data has also begun to sow doubts about the sustainability of U.S. economic growth in late 2006 and early 2007.
Official data on Thursday showed that U.S. economic growth has decelerated more sharply than expected in the second quarter. The world's largest economy grew at a revised 2.6 percent annual rate in the second quarter, slower than the 2.9 percent forecast a month earlier and about half of first quarter's 5.6 percent clip.
The political limbo over the nuclear ambitions of Iran, the world's fourth-largest oil exporter, has also added pressure to oil prices, analysts say.
European Union foreign policy chief Javier Solana said on Thursday he had failed to reach a deal with Iran's chief nuclear negotiator on Tehran's atomic plans, but they had paved the way for further talks.