Morgan Stanley said in a note on Monday there is a possibility that Organization of Petroleum Exporting Countries (OPEC) may raise its oil output quota.
The cartel's present production rate is around 31 million barrels per day (mmb/d), and the group forecasts the call on OPEC stocks to rise to 30.5 mmb/d in the second half of the year, the note from the investment bank added.
OPEC is likely to keep its output target unchanged when it meets on Friday because the global oil market appears to be in good shape and prices are expected to firm up from current levels, a senior Gulf OPEC delegate told Reuters on Sunday.
Front-month Brent crude LCOc1 was down 76 cents at $64.79 barrel by 0956 GMT. U.S. light crude CLc1 was down 70 cents at $59.60 a barrel.
OPEC oil supply in May climbed further to its highest in more than two years as increasing Angolan exports and record or near-record output from Saudi Arabia and Iraq outweighed outages in smaller producers, a Reuters survey showed.
OPEC supply rose in May to 31.22 million bpd from a revised 31.16 million bpd in April, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants.