Oil fell more than a dollar on Monday as the UN's nuclear watchdog said it was hoping for a deal with Iran and Opec ministers called for Wednesday's meeting of the group to keep near-maximum output.
Front-month US crude settled down $1.26 to $62.41 a barrel, ending a four-day rally that had pushed prices to a new one-month high of $63.92 a barrel. US gasoline settled down 8.71 cents to $1.6560 a gallon.
London Brent crude was down $1.84 at $62.34. "Opec is keeping it from going any higher," said Deborah White of SG CIB in Paris. "But we've risen on Nigeria. Nigerian crude is light, sweet crude. It tends to be in short supply."
Militant unrest in Nigeria, the world's eighth-biggest oil exporter, has cut back output by close to 500,000 million barrels per day (bpd) or more than 10.5 million barrels since the start of this year.
On Sunday, militants campaigning to gain more autonomy for Nigeria's oil-producing southern delta region threatened to halve the country's output by cutting another one million bpd.
The threat to Iranian output is for now hypothetical.
The UN atomic watchdog's board of governors met on Monday in Vienna to consider Iran's rejection of calls to curb its nuclear activity - the next step towards possible UN sanctions against the world's fourth biggest oil exporter.
Mohamed ElBaradei, director general of the International Atomic Energy Agency, said he hoped a deal could be reached to defuse the crisis and cited a surge of diplomacy involving Russia and EU powers.
Oil traders fear that any punitive action could prompt Iran to retaliate by cutting oil supplies.
At the last Opec meeting in January, Iran said it would continue to pump oil in any case - but it could change its mind.
"We are not interested in using oil as a weapon ... but if the conditions change, it could affect our decision," Iran's chief nuclear negotiator, Ali Larijani, said on Sunday.
However, Iran has lent its backing to leaving Opec output unchanged at its meeting in Vienna on Wednesday. Top Opec producer Saudi Arabia, Kuwait and the United Arab Emirates have also said Opec should not change its 28 million bpd ceiling.
Saudi Oil Minister Ali al-Naimi said supplies were "stable," but concerns about disruption was fuelling prices.
"Opec should not take any decision to decrease production because any such decision would be the main reason for price hikes," Naimi told Al Hayat newspaper.
Analysts at PFC noted lost output in Nigeria and Iraq had taken a significant amount of oil off the market in any case.
"Saudi Arabia and most Opec members continue to pump at high to near-full capacity utilisation, but production is down three-quarters of a million barrels per day from last summer's peaks," PFC said in a report.
"Regardless of what the statement out of Vienna is Wednesday, the physical reality of production problems scattered around the organisation will continue."
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