Oil fell below the $75-per-barrel mark on Monday, as some funds booked profits after OPEC expressed concern over near-record prices -- and pledged to pump more crude if needed.
U.S. light, sweet crude on Monday afternoon dropped as much as $1.02, trading at $74.77.
London Brent crude, viewed by many analysts as more reflective of global prices than U.S. oil, traded down 75 cents to $76.89 a barrel, after sliding as low as $76.42 a barrel. Brent hit $78.40 last week, just shy of its all-time high of $78.65 struck last August.
OPEC President and United Arab Emirates Energy Minister Mohammed al-Hamli said on Sunday that oil's strength was a worry -- but the world economy was still growing in spite of it.
"The statement is important...as it could be the first indication that OPEC may be willing to consider easing up on its supply allocations at its September meeting, and could be accounting for the softer opening we are seeing so far today," a Man Financial report said.
The comment helped spur a bout of profit taking on Monday, traders said, helping to send prices lower.
Prices were also affected by a report that quoted the head of OPEC's research division as saying a fair price for producers and consumers would be around $60 to $65.
Consumer governments have called repeatedly on OPEC to boost output to ease high prices. But OPEC has resisted so far, saying crude supplies are more than ample.
"If we see there is a need for more oil, we will supply more. But if we supply more now, it will go straight to stocks," the OPEC president told Reuters. "Whether we are going to have to change by the end of the year, I don't know."
OPEC is scheduled to meet next on Sept. 11 in Vienna.
Analysts expect funds, which have been an important force in the latest oil rally, to help set the near-term tone for oil prices, especially when they decide to book profits.
Data from the U.S. Commodity Futures Trading Commission last week showed net long positions of speculators on the New York Mercantile Exchange crude oil market had fallen in the week to July 17, from record highs in the preceding week.
"Some of them [funds] have huge profits in their books. Some are long since $60 a barrel. That's huge money to cash in," said Frederic Lasserre of SG CIB.
"There is this idea that there could be massive selling as soon as we touch last year's historical highs... And like last year, once you start to see the funds start taking profits, the downward spiral can be quite rapid."
Even as oil hovers near record highs, global economies are proving resilient to surging energy prices and oil consumption has remained strong.