Oil slid today ahead of an Opec meeting in Vienna that is due to set production levels for peak winter demand.
Most members of the Organization of the Petroleum Exporting Countries seem happy with Opec's current output, but Saudi Arabia, the world's biggest exporter, has yet to signal its views.
"There is a little bit of talk that the Saudis may be influenced to push for 0.5 million bpd increase," said Rob Laughlin, senior broker at MF Global. US light crude fell 72 cents to $75.98 a barrel earlier, after climbing 40 cents on Friday.
London Brent crude shed 85 cents to $74.22 a barrel. Saudi Oil Minister Ali al-Naimi has so far declined to make any comment.
He has not responded to a report by Washington-based consultancy PFC Energy saying Saudi Arabian sources signalled Opec may need to boost output by up to 1 million barrels per day (bpd). Any increase by OPEC would reverse some of the output cuts of 1.7 million bpd - roughly six percent of supplies - put in place since October 2006.
An increase might help to ease upward pressure on oil prices, which are close to a record high of $78.77 a barrel set on August 1st. Industrialised consumer nations have argued that crude oil stocks will shrink rapidly by January next year if OPEC does not increase output.
"Near-record spot prices, steep inventory draws and economic uncertainty would all be good reasons for OPEC to reverse its October 2006 production cuts at its meeting on September 11th," said Lehman Brothers in a research note. "But few observers, us included, believe that it will do so."
Worries over shrinking crude oil supplies are clouded by doubts over the economic health of top consumer, the United States. There are concerns that turmoil in the world financial markets, triggered by problems in the US mortgage sector, could tip the United States into recession and hit oil demand.
Payrolls in the United States shrank unexpectedly for the first time in four years last month, data showed on Friday, prompting concerns that credit market turmoil may become a drag on economic growth. Saudi Arabia told its customers in Asia it would keep its crude oil supplies steady for October from September levels, industry sources in Japan and South Korea said on Monday. More than half of Saudi Arabia's crude heads to Asia.