Oil slid $1.70 on Monday, after key OPEC member Saudi Arabia said the cartel would consider raising production, to halt crude's climb toward $100 and safeguard world economic growth.
Saudi Oil Minister Ali Al-Naimi said on Sunday the Organization of Petroleum Exporting Countries would discuss further increasing output, dragging prices further away from the record $98.62 per barrel struck last week.
U.S. light, sweet crude dropped 1.8 percent to close Nymex trade at $94.62, after having traded as low as $93.54 earlier. The commodity has now fallen three of its last four trading days.
London Brent crude traded down $1.66 at $91.52 per barrel.
The fall came as part of a wider commodities sell-off that took 3.5 percent off gold prices in early trade as the U.S. dollar gained against other currencies.
The weakening dollar has helped advance a 40 percent rise in oil prices since mid-August, prompting OPEC to hike output by 500,000 barrels per day (bpd) starting November 1.
But consumer nations have called on the producer group to hike output further to keep high prices from damaging economic growth.
"This is premature, but we will discuss the issue when we meet," Naimi told Reuters in Kuwait.
OPEC heads of state, accompanied by their oil ministers, will gather in Riyadh for a summit this week, while the next scheduled OPEC meeting to set output policy is scheduled for December 5 in Abu Dhabi.
Cartel officials insist speculative investment, international political tensions and a weak dollar are to blame for high prices, not a supply shortfall.
Oil inventories in top consumer the United States have fallen contra-seasonally this autumn, when demand traditionally weakens and encourages stock building ahead of winter.
Goldman Sachs said oil trade has become more prone to price swings of more than $2 as U.S. crude has held around $95 over the past few weeks.
"The high volatility and range-bound price action are indicative of the uncertainty that has characterized the oil market in its search for a new equilibrium," the bank said.
"We maintain that the current high price environment will likely prompt a cyclical rebalancing by the first quarter of next year as a result of a likely increase in OPEC production and some further demand softening."
Analysts said they expected oil price volatility to be influenced by the expiry of New York Mercantile Exchange December options contracts Tuesday.
Some 42,000 options contracts to buy oil at $100 were still open Friday. Experts said speculators might try to push oil into triple digits ahead of the expiry, but prices could tumble once the options expire.