Oil prices have stabilised over worries that US production may be hit due to tropical storm Carlos that might impact the Gulf of Mexico.

Brent crude remained unchanged at $63.87 a barrel, while the US light crude oil, also known as West Texas Intermediate (WTI), bounced from a session low of $59.62 per barrel, Reuters reported.

The US National Hurricane Center cautioned that a tropical disturbance in the southern Gulf of Mexico has a 70% risk of developing into a cyclone in the next 48 hours and may potentially threaten oil output in the region.

"The storm was centered 95 miles west of Acapulco late Sunday with top sustained winds of 70mph, and moving north-west at around 6mph."

The storm was centered 95 miles west of Acapulco late Sunday with top sustained winds of 70mph, and moving north-west at around 6mph, AP reports.

It could also trigger 6in to 10in in south-western Mexico.

Meanwhile, oil prices steadied due to talks in Geneva that may bring peace in Yemen where warplanes from a Saudi-led coalition bombarded Sanaa overnight.

Hosted by United Nations Secretary-General Ban Ki-moon, the talks are aimed at finding a political solution to the fighting that claimed many lives in Yemen.

The attacks also threatened to destabilise the Middle East Gulf and may not affect regional crude supply.

US investment bank Jefferies told the news agency: "Fundamental data indicate that the oil market is oversupplied by over two million barrels per day."