Benchmark Brent crude for May in London finished down 86 cents at $23.65 a barrel, 25 per cent below a nine-year peak of $31.95 struck on March 7 but well above its 1999 average of $18.03.

US Light crude for May ended $1.01 lower at $25.42 a barrel on the New York Mercantile Exchange.

Dealers said the advent of more supply from the Organisation of the Petroleum Exporting Countries under an agreement struck last week was pressurising sentiment on world petroleum markets.

Paul Ting of Salomon Smith Barney said the accord would probably produce a gradual increase in petroleum stockpiles severely depleted by a year of strict OPEC supply restraint.

``It should also result in price moderation, but not excessively sharp price declines,'' Ting said, adding a price in the low $20s per barrel was a reasonable expectation for the second half of 2000.

OPEC last Wednesday agreed that output for nine of its members, excluding Iran, would rise 1.45 million barrels per day (bpd).

Kuwaiti oil minister Sheikh Saud Nasser al-Sabah said Kuwait had lifted output to 1.98 million bpd in line with the deal.

Asian term customers of Kuwaiti oil said they had already been informed that state-owned Kuwait Petroleum Corp was ready to supply more crude from April and May onwards.

OPEC kingpin Saudi Arabia has also notified some small Asian term lifters of its crude that they will get full lifting volumes in April.

Further pressure emerged after Venezuela's energy and mines minister Ali Rodriguez said OPEC would probably have to raise oil supply again in the third quarter of the year to respond to a forecast jump in global demand.Rodriguez said in a television interview in Caracas that prices had fallen by less than anticipated.

``(The price) has dropped a bit, but less than I expected,'' he said. ``That makes me reaffirm my conviction that more production increases will have to be made when the second quarter ends and demand starts rising again from June.''

Iran opted out of the OPEC deal, but said it would increase production by its allocated amount anyway, in effect taking the group's output increase to 1.7 million bpd. Its decision not to formally join the OPEC deal revived concerns that the rift within the cartel would encourage more quota busting.US energy secretary Bill Richardson said on Monday he thought OPEC would exceed its new oil production quotas by about 400,000 bpd.

He added he believed Iraq would raise its output by 3,00,000 bpd and that new non-OPEC output would come to 400,000 bpd.

This should increase overall world oil supplies by a total of 2.8 million bpd before subtracting the amount OPEC by which was already overproducing, Richardson added.