Oil hovered around $82 a barrel on Thursday as sinking U.S. crude inventories and the threat of a storm gathering near Florida increased worries of a winter supply crunch in the world's top consumer.
Oil has traded above $80 for the past week but OPEC officials and oil analysts say the lofty price is unsustainable.
U.S. crude was up 17 cents at $82.10 a barrel by 11:02 a.m. EDT, after a record high of $82.51 on Wednesday, the sixth straight session to hit a record. London Brent crude fell 40 cents to $78.07.
Oil has risen by a third this year, driven by worries of fuel shortages during the Northern Hemisphere winter, supply risks in countries ranging from Mexico to Iran and flows of money into oil and out of poorly performing equity markets.
In the short term there are so many elements that are supporting prices, said Andrew Harrington, commodities analyst at Australia and New Zealand Bank.
But unless there's a major disruption, we should see softer prices in the medium term, possibly in the high $60s, he added.
Some members of the Organization of the Petroleum Exporting Countries share that view. Iran, the group's second biggest producer, said oil above $80 would not be long-lived.
This situation is not stable and cannot be permanent, said Hossein Kazempour Ardebili, Iran's OPEC governor.
OPEC agreed last week to add 500,000 barrels per day of supply from November to help calm consumer concerns over high prices and tighter oil inventories.
Some analysts said the move was too little, too late.
Supply concerns deepened after more oil firms on Wednesday pulled non-essential staff from offshore platforms in the Gulf of Mexico because of the threat of a storm.
Shell Oil Co said on Thursday it would shut all its production in the U.S. Gulf of Mexico -- 370,000 barrels per day of oil equivalent -- by end of the day due to the threat.
The U.S. National Hurricane Center said a tropical disturbance over Florida could strengthen into a tropical cyclone and cross into the Gulf of Mexico in the coming days, threatening a quarter of the nation's oil production.
Wednesday's record-high oil price came after data showed crude oil stocks in the United States fell by 3.8 million barrels last week, nearly twice the 2-million-barrel draw expected in a Reuters poll of analysts.
The market had already rallied after the U.S. Federal Reserve's interest rate cut raised expectations that energy demand would remain robust. But some analysts expect momentum from the Fed to wane shortly.
We expect the Fed-led euphoria to die down in coming days, as focus once again reverts to the more troubling macro numbers coming out of the U.S., said Edward Meir, commodity analyst at MF Global.
There is no doubt that after setting six consecutive records, crude prices are severely overbought and due for a pullback.
(Additional reporting by Annika Breidthardt in Singapore)