Investing.com - Oil prices trimmed early gains on Monday as concerns over a global supply glut offset worries over escalating geopolitical tensions in the Middle East.
On the New York Mercantile Exchange, crude oil for July delivery was last up 0.39% to $60.84 a barrel, off session highs of $61.7.
Brent crude for July delivery, the global benchmark, eased 0.18% to $66.69 a barrel on the ICE Futures exchange in London, after rising to highs of $67.86 in early trade.
Oil prices gained ground on Monday after Islamic State militants seized control of the city of Ramadi in western Iraq over the weekend.
Meanwhile, Saudi-led air strikes in Yemen resumed after a ceasefire expired on Sunday night, adding to concerns over potential supply disruptions.
But oil's gains were held in check amid worries that U.S. shale oil production could rebound rapidly if prices keep rising.
U.S. oil prices have staged a recent rally after dropping more than half from June to January, amid expectations that U.S. output has peaked and may start falling in the coming months.
But global oil production is still outpacing demand following a boom in U.S. shale production and after OPEC's decision last year not to cut production.
In its monthly report last Wednesday, the International Energy Agency said global crude supply was up 3.2 million barrels a day year-on-year in April, far outstripping the increase in demand. The IEA estimated global oil demand growth of 1.1 million barrels per day this year.
On Monday Reuters reported that Iran's Deputy Oil Minister Rokneddin Javadi said OPEC was unlikely to cut output at its meeting on June 5.
He also said he was hopeful that Iran’s oil exports would return to pre-sanctions levels of around 2 million barrels per day within three months once a deal on limiting the country’s nuclear program is reached.