While the producer group complied with a pledge to curb output and ease a glut in 2017, USA flows that are gaining a bigger slice of the prized Asian market may prompt some nations to boost supplies, said Warren Patterson, a commodities strategist at the Dutch bank.
The crude outputs are looking to take another miserable turn as the United States daily reports may climb to levels similar to what they were producing past year.
While a brighter economic outlook has underpinned demand expectations, expanding American production remains a challenge to the Organization of Petroleum Exporting Countries and its allies, which are trying to prop up prices via output curbs.
Broader markets were roiled by U.S. President Donald Trump's decision to go ahead with tariffs in imported steel and aluminum, sparking fears of a trade war.
Brent was last at $64.96, down 0.81 percent on the day. ING forecasts Brent at $57 in the second half of 2018.
US West Texas Intermediate (WTI) crude futures fell 27c to $61.77 a barrel.
Crude's rebound since previous year is encouraging American drillers to pump even as they make efforts to be disciplined on spending, Patterson said.
ING's Patterson agrees that keeping a lid on price hikes is necessary; in an interview in Singapore he said, "We need to see prices in the short-term trade below $60 to reduce that incentive for USA producers".
As American output continues to expand, more exports will sail to Asia, the traditional bastion of Middle East producers.
Traders are saying the early price action was related to a drop in the number U.S. rigs drilling for more production and Friday's robust U.S. Non-Farm Payrolls report, which could lead to increased demand.
LONDON, March 13 (Reuters) - Oil rose on Tuesday, after Libya said loadings of crude at a key port had been suspended, offseting an earlier dent to the price caused by evidence of the inexorable growth in USA oil output.
Despite this, market conditions remain weak, and prices have not returned to their January highs of over $70 per barrel for Brent and nearly $67 for WTI.
U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday. Asia is the biggest buyer of the supplies.
Support on Wednesday came from a report that US crude inventories are not rising as much as expected during the spring season that is starting, implying healthy demand.
For the record, the Islamic republic is allowed to pump up to 3.8 million barrels per day (bpd) under the cutback deal, and Zanganeh said his country could produce about 100,000 bpd more.