Oil eased on limited profit-taking on Tuesday while holding near a two-month high as investors shift more funds into the commodities complex and fuel inventories in the United States look set to fall again.
U.S. light sweet crude for May delivery dipped 32 cents or 0.48 percent to $66.42 a barrel, fading further from Monday's $67.90 peak, the highest in two months. London Brent crude edged down 25 cents to $66.59 a barrel.
Commodities have rallied over the past week as investors allot more funds to the sector at the start of the second quarter, pushing copper and zinc to new highs and giving a fresh lift to oil prices weighed down by bulky crude oil inventories.
Iran's dispute with the West over its nuclear research and the prolonged loss of a quarter of Nigeria's production has added to the investment push, helping bring prices closer to last year's record peak of $70.85 a barrel.
The fundamental picture may sharpen on Wednesday, when analysts expect U.S. government data to show a modest 900,000-barrel rise in crude stocks, but distillates are expected to fall by 1.5 million barrels and gasoline by 1.8 million barrels.
While crude supplies recently touched a seven-year high, dealers are anxious that the cut to Nigerian exports and growing demand heading into the summer driving season may whittle down supplies in the next few months.
Royal Dutch Shell would restart its offshore 115,000 barrel-per-day EA field in days, but that would still leave more than 400,000 bpd of production off line.
Oil industry and military officials said that additional naval patrols in the Niger Delta had not convinced Shell to restart its onshore Forcados production after a wave of militant attacks in the world's eighth-largest exporter.
The Organization of the Petroleum Exporting Countries (OPEC) will meet informally during talks between oil consumers and producers in Qatar starting April 22, but ministers say the cartel has little choice but to keep pumping at near full throttle with prices nearing the $70 mark.