SINGAPORE—Oil was steady on Tuesday, after having settled lower for the third consecutive day on hints that OPEC could raise output when it meets next in February and amid continuing economic concerns.

US light crude for January delivery, which expires later on Tuesday, was up 10 cents at $90.73 a barrel by 0639 GMT.

London Brent crude was up 14 cents at $91.43.

The US contract settled 64 cents lower at $90.63 on Monday, off an intraday low of $89.49, after Algeria’s oil minister and incoming OPEC president Chakib Khelil said the cartel may increase output at a Feb. 1 meeting if the market needed more crude.

Khelil’s comment came less than two weeks after OPEC met in Abu Dhabi on Dec. 5, and decided not to raise output.

There are signs that OPEC supply is already rising in December as a period of maintenance ends at oilfields in the United Arab Emirates.

Worries about supplies as the Northern Hemisphere headed into winter helped send US crude to near $100 a barrel in late November, but worries of a possible glut should there be a recession in top energy market the United States have pulled prices back to $90.

"With demand growth losing steam in the west and fresh supply in the pipeline, oil trends may already have passed a tipping point, setting the stage for further drops to an average $79-$80/barrel for WTI in 2008," Antoine Halff, an energy research analyst with Fimat, said in a note released overnight.

Signs that the US economy may be weakening are multiplying and prompting increasing warnings that a recession is around the corner.

US home builder sentiment remained at a record low for a third consecutive month in December, weighed down by problems in the mortgage market and a huge supply of unsold houses, an industry group said on Monday.

Oil prices could rebound later this week if weekly stocks data shows a fall in crude and distillates stocks as forecast by analysts.

US crude oil inventories likely fell for the fifth week in a row last week as fog hit import deliveries at the Houston Ship Channel, a preliminary Reuters poll of industry analysts showed on Monday.

Distillate stocks, that include heating oil and diesel, were forecast to have fallen for the second consecutive week, while gasoline supplies probably rose for the sixth straight week, the survey showed.

On average, crude stocks were expected to have fallen 1.4 million barrels while distillate stocks likely declined 600,000 barrels, analysts said. —Reuters