Oil fell on Tuesday after producer group Opec bent over backwards to assure consumers they would fill up their fuel tanks this winter. Opec's core Gulf producers appear determined to build up oil stockpiles in the United States, Europe and Japan to keep prices from shooting too high during the first quarter of 2006.
US crude futures slipped 51 cents to $56.85 a barrel by 1704 GMT, after falling more than $1 on Monday. London Brent was off 23 cents to $54.65.
Opec's president said on Monday the group was aiming for a stock level in major consuming countries of 56 days of forward demand cover. Given an end September stock level of 52 days, that leaves room for a huge build in inventories.
"Taken at face value, Opec's statement that it is targeting a stock level of 56 days of forward cover is rather bearish and potentially likely to trigger another round of short-selling," said Kevin Norrish of Barclays Capital.
That stock level was last seen in 1999, said Barclays. Oil prices early in 1999 fell close to single digits.
Opec signalled it was prepared to keep supplies steady after a 20 percent slump in US oil from an end-August record $70.85.
The cartel is to meet in Kuwait on December 12, but is unlikely to slow pumping rates of around 30 million barrels per day (bpd) despite ample oil inventories.
Consuming nations have repeatedly called on Opec to do its utmost to bring down prices that have braked economic growth.
US consumer confidence improved in November as Americans took comfort from lower gasoline prices and better job prospects. The Conference Board, a private research group, said its index of consumer moods jumped to 98.9 from 85.2 in October.
"I think these numbers are consistent with the view that the US economy continues to chug along nicely," said Alex Beuzelin of Ruesch International.
And according to the Paris-based Organisation for Economic Cooperation and Development global economic growth quickened in the last few months and inflation is under control despite high world oil prices.