Oil stayed within striking distance of last night's $65 record high after a top energy body said non-OPEC output was falling short of expectations.
The International Energy Agency, adviser to 26 industrialised nations, also nudged up its world oil demand growth forecasts for this year and next, leaving already stretched OPEC to fill the supply void.
The IEA report came on the heels of US stock data on Wednesday that showed another fall in gasoline inventories in the world's biggest consumer, and news of less oil from the North Sea Brent field in September.
The IEA cut non-OPEC supply growth this year by 205,000 barrels per day, with production problems in the U.S. Gulf, Mexico, Norway and Britain accounting for most of the shortfall. Russia is also pumping less than expected.
US light sweet crude was off 40 cents at $64.50 at midday after hitting a record-high $65.30 in earlier trade. London Brent was down 22 cents at $63.77 after touching $64.57.
Even with US crude averaging above $53 a barrel for the year to date, in real terms prices are still below the $80 a barrel average of 1980, after the Iranian revolution.
The United States economy is proving resilient and gasoline demand is powering ahead.
As oil producers like Norway and Russia fail to live up to expectations, consumers are increasingly reliant on OPEC ountries to fill the gap. But here too there are concerns over future supplies.
Oil prices have risen in nine of the past 11 sessions as the market has been edgy over possible disruptions to exports from Saudi Arabia and Iran, OPEC's two-largest oil producers.