Oil prices slipped on Friday after the world's top crude exporter Saudi Arabia said it was ready to raise output to new record highs, potentially adding to a global supply glut.
The U.S. currency strengthened against the euro, also weighing on dollar-denominated oil, after the International Monetary Fund pulled out of stalled debt talks with Greece.
Saudi Arabia said it was in talks with Indian buyers to supply additional crude, meaning the Middle Eastern exporter could top its record of 10.3 million barrels per day produced in May.
Brent crude LCOc1 was trading 63 cents lower at $64.48 a barrel at 0850 GMT, while U.S. light crude CLc1 was down 77 cents at $60.
"The dollar is gaining some ground against the euro. If anything, that's bearish for oil," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
The euro =EUR slipped 0.2 percent against the dollar in early trade after stalling Greek debt talks increased the risk of Greece being pushed out of the euro zone.
The International Energy Agency said on Thursday it expected world oil demand to rise more than expected this year on the back of economic recovery and a relatively cold winter in the northern hemisphere.
However, analysts at JBC Energy said this growth was focused on the first half of the year, meaning demand would tail off until the end of the year.
"We believe that … growth will likely slow as the price-driven demand upswing of recent quarters fades" over the second half of the year, they wrote.
Thanks to relatively cheap crude oil, refiners have enjoyed high margins as demand for refined products has been strong, but there are early signs that overproduction will drag on profits as oversupply emerges.
Independent stocks of oil products at Europe's Amsterdam-Rotterdam-Antwerp hub rose 5 percent in the week to Thursday to a record high of 5.845 million tonnes.
Should demand for refined products fall due to emerging oversupply, analysts have said that would spill back into the crude market and pull down prices there as well, as refineries slash orders and reduce output.
