Oil prices have fallen over supply concerns following escalating geopolitical disturbance in the Middle East.

July Brent crude fell 25 cents at $66.29 a barrel and the US crude for July dipped 27 cents at $60.45 a barrel, Reuters reported.

Oil traders are worried that conflicts in Iraq could disrupt supply due to a rise in geopolitical tension following attacks by Islamic State fighters on the city of Palmyra on Thursday.

"No-one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation."

Following a fall in US crude stockpiles last week, crude futures in the country is going up.

Commerzbank Frankfurt senior oil and commodities analyst Carsten Fritsch told the news agency: "No-one wants to hold open positions ahead of a long weekend so books are being squared, bringing some consolidation."

The US Energy Information Administration released data that highlighted a dip in the US oil product stockpiles, suggesting a strong demand.

American Automobile Association (AAA) reported that the US travel is expected to reach a ten-year high over Memorial Day on 25 May showing a sign of slip in product inventory even further over coming weeks.

Crude stocks in Cushing, Oklahoma, declined by almost 740,000 barrels between Friday and Tuesday, according to trade sources.