Oil rose Tuesday afternoon to well over $73 per barrel -- after sinking more than $1 below $73 a barrel earlier in the day. The slide was attributed to further assurances from OPEC that it would pump more crude if needed, as well as expectations of higher U.S. fuel stockpiles.
U.S. light sweet crude for September delivery (delayed) fell.
London Brent crude (delayed) declined for a third day -- slipping towards $75.
"The fall today has been triggered by the comment from an Iranian oil official," said Olivier Jakob of oil consultancy Petromatrix. "It is the combination of other OPEC statements at the weekend especially after OPEC had been quiet for a while."
Energy company shares were also down following the oil prices slip. Shares of Exxon Mobil by mid-afternoon Tuesday fell as much as $1.29, or 1.38 percent, to trade at $92.15 on the New York Stock Exchange.
OPEC's second biggest producer Iran said on Tuesday the exporter group would pump more crude if necessary.
"In case the oil market needs it, OPEC will inject more oil into it," the official IRNA news agency quoted Javad Yarjani, head of OPEC affairs at Iran's Oil Ministry as saying.
His comment followed similar remarks from OPEC President Mohammed al-Hamli on Sunday.
Hamli, also energy minister of the United Arab Emirates said the Organization of the Petroleum Exporting Countries is worried high oil prices may hurt the world economy.
Brent hit $78.40 last week, just off its all-time high of $78.65 last August.
The market was also weighing expected increases in inventories of refined fuel in top consumer the United States versus a forecast drop in crude oil inventories.
"The strong watch will be on the gasoline stockpiles," said Jakob of Petromatrix.
U.S. crude inventories are expected to have declined by 1.1 million barrels last week, with refiners ramping up production to offset worries over summer fuel supplies, a Reuters poll of analysts showed.
Gasoline stockpiles are seen rising by 300,000 barrels last week and distillate stockpiles 800,000 barrels in U.S. Energy Information Administration (EIA) data due at 10:30am New York time on Wednesday.