London: Oil eased on Wednesday after a reassurance from Iran that it had no plans to cut oil exports.
The market had hit a new record of nearly $127 the previous session, after Iranian President Mahmoud Ahmadinejad had said a proposal to cut crude output was under review.
A top Iranian official said on Wednesday that Tehran is continuing sell oil to international customers as usual and has no plans to cut exports to world markets.
US light crude for June delivery was down 50 cents at $125.30 a barrel by 1059 GMT. It has hit a string of record highs over the past week and reached a peak of $126.98 a barrel on Tuesday.
London Brent crude was down $1.04 cents at $123.06 a barrel.
The comment from the National Iranian Oil Company official soothed the volatile market.
"There is no plan to cut exports and we keep our promises (to clients) ... and we export as usual," said Hojjatollah Ghanimifard, executive director of international affairs at NIOC.
Concern in the oil market that Tehran's dispute with the West over its nuclear programme may lead to a disruption in its crude exports have helped drive oil to record highs.
The market awaited weekly fuel inventory data from the United States, due at 1430 GMT, forecast to show an 800,000 barrel rise in distillate stocks and a 1.8 million barrel increase in crude inventories, their fourth increase in a row.
The view that supplies of distillates such as heating oil and diesel fuel are tightening helped drive US heating oil futures to a record of $3.6989 a gallon on Tuesday, which boosted the entire oil complex.
"Distillates are clearly driving the market and US distillate inventories will have to be watched this week," said Marc Lansonneur, Société Générale's head of commodities derivatives in Asia. European middle distillate stocks fell sharply in April to 361.28 million barrels, down 1.4 per cent from March and 7.2 per cent lower than a year ago, data from industry monitor Euroilstock showed on Tuesday.
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