Oil flat after fall from record near $140

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U.S. crude CLc1 slipped 2 cents to $134.59 a barrel by 3:27 a.m. British time after ending 25 cents lower on Monday, as traders quickly took profit from a rally to a record $139.89 triggered by a falling dollar and the closure of a North Sea oil platform.

London Brent crude LCOc1 fell 11 cents to $134.60 a barrel.

Top exporter Saudi Arabia appears poised to ramp up production for a second month in July in an effort to shake bullish investors out of the market, but analysts and market sources said it may struggle to find willing buyers.

"They can increase production, they can turn on the tap, but can they get enough traders to take it?" said Greg Smith, who manages $500 million in futures as the head of fund Global Commodities in Australia.

Refiners in the United States and Asia said they were unlikely to buy more Saudi crude unless the kingdom began offering it at a sizeable discount.

United Nations chief Ban Ki-moon said over the weekend that Saudi Arabia was set to hike its oil output to 9.7 million barrels per day in July, indicating a total 550,000 bpd or 6 percent increase in supply since May.

Saudi Arabia's plans drew praise from the United States and Britain ahead of a crisis meeting of oil producers and consumers on June 22 to find a solution to record oil prices.

Oil has rallied around 40 percent this year on a rush of speculative money seeking hedges against inflation and the weak dollar.

On Tuesday, the U.S. currency steadied against the euro after falling the previous day on record euro-zone inflation that supported expectations the European Central Bank will hike interest rates next month.

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