Crude oil topped a record $58 US a barrel in Monday morning trading in New York before sliding back as OPEC oil ministers pondered production hikes.
Crude futures traded as high as $58.28 US before slipping back to $56.95 US by 2:30 p.m. EDT, down 32 cents from Friday.
Last month, the Organization of Petroleum Exporting Countries decided to boost its production ceiling by 500,000 barrels a day and said it was ready to push through a further half-million barrel increase if necessary.
"Until now, there is no shortage in the market," OPEC president Sheik Ahmed Fahd Al Ahmed Al Sabah said. But he said if prices continued to rise or stayed at current levels for another couple of weeks, then OPEC could proceed with the second stage of the production increase.
But some observers predicted that OPEC's supply still won't be enough to prevent a shortage of gasoline in the U.S. during the peak summer driving season.
Oil markets were also continuing to react to last week's controversial report from Goldman Sachs that predicted that oil could top out at $105 US a barrel.
Even $58 US oil is enough to give markets pause. Analysts worry that costly oil will eventually hurt corporate profits and costly gasoline (which is already at record levels in the U.S.) will crimp consumer spending.
Even though oil prices are at or near record highs, analysts point out that the inflation-adjusted price of oil remains far below the level it reached in the late 1970s and early 1980s, during the Iran hostage crisis.