New York's main oil futures contract, light sweet crude for August delivery, was 10 cents lower at $136.64 per barrel after a gain of $1.38 to $136.74 on the New York Mercantile Exchange yesterday.
Brent North Sea crude for August was 19 cents lower at $135.72 a barrel.
Saudi Arabia said at an unusual weekend summit of oil consumers and producers that it was hiking daily output by more than 200,000 barrels to 9.7 million.
The move was expected but the world's lynchpin crude producer said it could significantly raise output again if necessary.
"Everybody's waiting to see exactly what OPEC can or cannot do," said David Johnson, an oil analyst with Macquarie Research in Hong Kong.
Saudi Arabia, the leading producer in the Organisation of the Petroleum Exporting Countries (OPEC) cartel, called the summit after oil prices almost doubled in the past year to just shy of $140.
Soaring crude costs have triggered protests in several countries and fears for global economic growth, and analysts said the Saudi pledge had failed to allay concerns about tight global supply.
The White House yesterday welcomed the Saudi announcement but expressed scepticism that the move would impact US petrol prices much.
