Crude oil have retreated again on predictions that a U.S. government inventory report today will show a eighth consecutive weekly rise in U.S. crude stocks of 2.5 million barrels and a fifth weekly drop in gasoline supplies.
May crude oil futures fell $0.35 to $56.75 a barrel.

Federal Reserve Chairman Alan Greenspan added to downward pressure on oil prices by saying that market forces could increase the inventories to the levels where the recent oil price «frenzy» will subside.

"If sustained, these market technicals could encourage enough of an inventory buffer to damp the current price frenzy," Greenspan said in a refiners’ conference in San Antonio.

Greenspan expressed concern over the world’s capacity to produce oil and refine oil, labelling lack of global refining capacity as "worrisome."

Greenspan expressed hope that a rise in energy costs will lead to a drop in dependence on oil. "The recent shift in expectations, however, has been substantial enough and persistent enough to bias business-investment decisions in favor of energy-cost reduction," he said.

"Of critical importance will be the extent to which the more than 200 million light vehicles on U.S. highways, which consume 11 percent of total world oil production, become more fuel efficient as vehicle buyers choose the lower fuel costs of lighter or hybrid vehicles," Greenspan added.

Crude oil price hit a record of $58.28 a barrel two days ago on the NYMEX. The prices were boosted by concerns over the possible depletion of US gasoline supplies ahead of the driving season that usually brings gas demand to its peak level in May.