Oil eased towards $87 on Thursday after Nigeria's energy minister raised the possibility OPEC may review output, reflecting its unease with record prices the United States says are of great concern to its economy.
U.S. crude was down 16 cents at $87.24 a barrel by 5:59 a.m. EDT. It briefly hit an all-time high of $89 on Wednesday in a rally that added almost $10 in eight days.
London Brent was down 18 cents at $82.95.
Nigeria's minister of state for petroleum told Reuters on Wednesday he did not rule out that OPEC ministers may turn informal talks at an OPEC heads of state summit in Riyadh next month into a full-blown meeting to review output.
But on Thursday an Iranian official insisted there was no need for OPEC to boost output further, having agreed to add 500,000 barrels per day to the market from November 1.
Geopolitics is the reason behind very high oil prices, said the official from OPEC's second biggest producer. Bringing calm to the international situation would help the price.
Oil has surged 45 percent since the start of the year.
The rally has accelerated this month on a combination of relatively low oil stocks in consumer nations, unprecedented weakness in the dollar and the prospect Turkey will send troops into northern Iraq to hunt down Kurdish rebels there.
Although little oil is at risk from any military action by Turkey in northern Iraq -- Iraq's exports via its pipeline to Turkey have been sporadic since 2003 -- traders fear a conflict could endanger other supplies from the Middle East.
Oil has moved closer to the 1980 inflation-adjusted high.
That year - a year after the Iranian revolution and at the start of the Iran-Iraq year - oil averaged $90.46.
This year's average is $67.27.
The move up is...a completely fundamental phenomenon in our view, and is the result of a supply-demand dynamic that has been happening in slow motion for a full year, analysts at Barclays Capital said in a report. The issue seems no longer to be whether oil will reach $100 per barrel, but when.
Signs of slowing demand in top consumer the United States were a tempering factor on Thursday, however. U.S. data on Wednesday showed year-on-year growth of just 0.2 percent.
Energy Secretary Sam Bodman said high prices were of great concern to the United States, whose economy is facing headwinds from the meltdown in the subprime mortgage market.
With prices pushing towards $90, and $100 being bandied about as another likely target, both OPEC and the United States are under increasing pressure to try to talk the market down, said Edward Meir, an analyst at MF Global.
(Additional reporting by Jonathan Leff)