Oil futures dropped but regained ground from earlier lows after Saudi Arabia's oil minister defused rumors that the oil cartel might agree to boost production at a meeting this weekend.
However, Ali Naimi left open the possibility that the Organization of Petroleum Exporting Countries will agree to increase output during a meeting in Abu Dhabi, in the United Arab Emirates, next month.
"(Production will be discussed) when OPEC meets in Abu Dhabi, not here," he told Dow Jones Newswires in Riyadh, Saudi Arabia, where this weekend's meeting will be held. "This is not meant to be that kind of a meeting."
Light, sweet crude for December delivery fell $1.24 to $95.08 a barrel in afternoon trading on the New York Mercantile Exchange after falling as low as $93.54 earlier.
"For the first time, the markets may have stumbled on a possible trigger to induce some justified profit-taking," said Edward Meir, an analyst at MF Global UK Ltd., in a research note. "This is coming our way from none other than the Saudis, who let it be known over the weekend that the cartel, in fact, could 'discuss' a quota release," or increase in crude output.
It remains unclear how much long-term impact another increase in oil production by OPEC would have on high prices. A previous 500,000 barrel a day increase in production, which went into effect Nov. 1, was widely viewed as too little too late to stop crude's runup to near $100 a barrel. Crude prices rose 42 percent between late August and last week, when they reached a record trading price of $98.62 a barrel.
"The comments by the Saudi oil minister on the weekend didn't necessarily say that they're going to increase production, it wasn't quite that extreme, but the mere fact that he's speaking aloud about it shows that the issue is there," said Tobin Gorey, commodity strategist at the Commonwealth Bank of Australia in Sydney.
A rebound in the dollar on Monday also pressured crude prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the U.S. currency is falling. Many analysts blame speculative investing driven by the falling dollar for the autumn rally in crude prices.
Other energy futures also fell. December gasoline dropped 2.34 cents to $2.4326 a gallon on the Nymex, while December heating oil futures fell 2.29 cents to $2.5959 a gallon.
December natural gas rose 13.6 cents to $8.033 per 1,000 cubic feet on forecasts for cooler weather in the Northwest and Midwest over the next couple of weeks.
In London, December Brent crude futures fell $1.10 to $92.08 a barrel on the ICE Futures exchange.
Oil prices were also supported by reports of an attack an Exxon Mobil Corp. oil export terminal in Nigeria, but company officials said operations were not disrupted.
Analysts are not surprised oil prices are taking a breather from their record-setting rally.
"As some point, somebody needs to take profits," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.
However, few analysts were ready to declare Monday's swoon the beginning of the long-expected correction, or sharp price decline. Rafield cautioned against reading too much into the Saudi comments on OPEC output.
"I think it's the usual jawboning that precedes any meeting," Rafield said.
Prices swings could be volatile this week due the expiration of crude options on Tuesday and the expiration of the December crude contract Friday.
Investors will also have plenty of additional supply and demand data to chew on. On Tuesday, the International Energy Agency will issue its monthly report on crude supplies and demand. And on Wednesday, the Energy Department's Energy Information Administration will issue its weekly inventory report.
"We are not ruling out one more round of fresh highs in December (crude) futures with a run into the $98-$99 area possible," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Russian Finance Minister Anton Siluanov announced a possible move that Russia can take in response to new US sanctions
Not that long ago, American soldiers would train their skills to counter insurgent and partisan military organizations. These days, they are trained to show resistance to the regular army of a potential adversary
The Central Bank of Turkey announced measures to protect the financial market of Turkey against the background of the collapse of the Turkish lira and conflict of interests with the United States of America