Oil prices eased for a second day yesterday as traders booked profits from a week-long rise after Saudi Arabia said it could quickly tap spare oil production capacity if necessary. US light crude last traded down 47 cents to $ 54.10 a barrel, extending Monday?s 82 cent loss in New York. London Brent crude was down 30 cents to $54.10. Prices were dampened by renewed signs of rising OPEC supply and comments from the world?s leading exporter Saudi Arabia that it was ready to tap spare capacity if buyers needed more oil.

Adel al-Jubeir, foreign affairs adviser to Saudi Arabia?s Crown Prince Abdullah, said after a meeting between President Bush and Abdullah in Texas that world oil supplies were adequate, but the kingdom was willing to provide as much crude oil as buyers wanted. The kingdom is producing slightly over 9.5 million bpd, with between 1.3 million and 1.4 million bpd in spare production capacity that could quickly be tapped, Jubeir said. Saudi Arabia is expected to provide most of a 500,000-bpd increase in OPEC supplies next month, the cartel?s President Sheikh Ahmad al-Fahd al-Sabah, said last week.

OPEC oil producers are pumping 30.4 million barrels per day (bpd) in April, up 700,000 bpd from March, leading tanker tracking consultancy Petrologistics said on Tuesday. Petrologistics? preliminary estimate for the month would put OPEC April supply above the 25-year output high hit last September and October. Rising demand in China and the United States has placed increasing strain on international supplies, driving prices up around $17 from this time last year.

?Prices appear to have been supported by high demand growth and limited spare production capacity notwithstanding that OECD commercial inventories are above seasonal five year average levels?, said BP chief John Browne, reporting the company?s 29 percent rise in first quarter profits. While many analysts see sufficient supplies of crude oil and products in the short term they remain wary about constraints on global refining capacity and a possible shortage of products later in the year.

A spate of technical glitches in Louisiana, Texas and Kansas has raised fears that refineries may struggle to meet an expected rise in gasoline demand this summer. US gasoline stocks probably declined by 800,000 barrels as implied demand held strong while production likely dipped and imports dropped, industry analysts said on Monday. US commercial crude inventories likely rose by 400,000 barrels last week as imports rebounded, analysts said. The US government will release weekly inventory data today.