Oil slipped again on Tuesday extending a slide from record highs on concerns about the U.S. economy, a recovery in the dollar and indications OPEC has already substantially raised oil output in advance of November 1.

U.S. crude was down nine cents at $85.93 a barrel by 0838 GMT. London Brent fell 17 cents to $83.10.

Oil has lost more than $4 since hitting a record high of $90.07 on Friday, and fell on Monday with gold and other commodities as the dollar rebounded from a record low against the euro.

The levels were still up about five percent from the start of the month and 40 percent from the start of the year, buoyed by worries about insufficient energy inventories during the Northern Hemisphere's winter and geopolitical concerns.

OPEC has already boosted October supplies by 500,000 barrels per day in anticipation of November 1, when an agreement to raise production kicks in, according to tanker tracker Petrologistics.

The 10 OPEC members subject to output limits, all except Iraq and Angola, are set to pump 27.5 million barrels per day, up 300,000 bpd on September, led by kingpin Saudi Arabia.

Overall output is set to rise 500,000 bpd to 31.4 million.

The market is still overheated from its rally and could go down to around $80. But depending on what the U.S. stocks do and if the dollar weakens again, the market could go up to $90, said Gerard Rigby from Fuel First Consulting in Sydney.

Top consumer the United States will release weekly oil stocks data on Wednesday.

U.S. crude oil stocks are seen up 100,000 barrels, after a 1.8 million-barrel build in the week ended October 12. A Reuters poll also forecast a 1.1 million-barrel increase in gasoline stocks but a 300,000-barrel draw on distillates for the week to October 19.

Concerns that a housing slump in the world's largest oil consumer could act as a drag on the economy and limit future oil demand has played against recent bullish sentiment.

Tensions in the Middle East are also easing for now, after Turkey said late on Monday it would exhaust diplomatic channels before launching any strike into northern Iraq to root out Kurdish rebels, who killed at least a dozen Turkish soldiers in fighting over the weekend.

Analysts last week credited the heightened tension between Iraq and Turkey as one factor behind oil's rise to record highs.

(reporting by Annika Breidthardt and Janet McBride)