By mid-morning on Tuesday, US light, sweet crude had fallen 84 cents to $92.69 a barrel in Asian electronic trading, after closing in New York at $93.53 on Monday.
Earlier on Monday the price had spiked to a record intra-day high of $93.80, fuelling expectations among some traders that prices may break the $100 a barrel mark by the end of the year.
In London, Brent crude also soared by $1.63 a barrel to end Monday's trade at $90.32 after it too hit an intra-day record of $93.80 – the first time it has broken through the $90 mark.
Mohammed bin Dhaen al-Hamli, president of Opec, said producers would always step in to meet shortfalls, but a 34 per cent surge in prices since mid-August was driven by speculative investment and political tensions.
"The market is increasingly driven by forces beyond Opec's control, by geopolitical events and the growing influence of financial investors," Hamli, who is also the UAE oil minister, said.
Oil ministers will meet for informal talks as oil producing heads of state gather in Riyadh in mid-November, but Hamli ruled out an decision to increase output at those talks.
Opec has already agreed to produce an additional 500,000 barrels per day of oil from November 1.
Several factors are thought to be driving the price up, including concerns over tensions in northern Iraq and the nuclear dispute with Iran.
In Sudan, meanwhile, fighters in the Darfur region have raised the prospect of disrupting supplies in the country after they kidnapped five oil workers.
They have warned of further action unless oil countries operating in Sudan leave within the week.
|"The market is increasingly driven by forces beyond Opec's control, by geopolitical events and the growing influence of financial investors" |
Mohammed bin Dhaen al-Hamli, Opec president
Also pushing up prices in recent days have been worries over disruption to Mexico's oil supply.
On Sunday, Pemex, the state oil firm, said it would shut down about a fifth of production in the Gulf of Mexico due to an approaching tropical storm.
At the same time the weakness of the US dollar has boosted the price of dollar-denominated commodities – such as oil – helping the price of crude surge by more than 30 per cent since the middle of August.
After slipping back in Tuesday's trade as investors took the opportunity for some profit taking, analysts said oil prices could surge again midweek if the US Federal Reserve cuts interest rates at its policy meeting Wednesday.
Last month Opec pledged to raise output by 500,000 barrels a day from November 1, but that seems to have done little to calm the market so far.
Opec has said it sees no reason for any further increase, blaming the price rise on speculators and a shortage of refineries rather than a shortage in supplies of crude.