Akos Stiller | Bloomberg | Getty Images
Khalid Bin Abdulaziz Al-Falih, Saudi Arabia's energy minister and president of OPEC, speaks as Alexander Novak, Russia's energy minister, left, listens during a news conference following the 172nd Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, May 25, 2017.
International benchmark Brent crude futures fell $1.65, or 1.9 percent, to $84.64 a barrel by 2:29 p.m. ET. The contract hit a nearly four-year high of $86.74 on Wednesday.
U.S. crude futures ended Thursday's session down $2.08, or 2.7 percent, at $74.33, after hitting $76.90 on Wednesday, the highest level since November 2014.
On Wednesday, Brent climbed to the most technically overbought level since February 2012, while WTI inched higher to the most overbought since January. The relative strength index of both contracts rose this week to above 70, a technical level often regarded as signaling a market that has risen too far.
"The market was a bit over-extended on a short-term basis," said Brian LaRose, senior technical analyst at ICAP-TA.
"I would need to see both $84.35 and $82.85 broken (for Brent) to suggest that something more than just a minor rest stop in an ongoing uptrend is likely to take place here."
Also weighing on oil prices, Cushing, Oklahoma, crude inventories rose about 1.7 million barrels from Sept. 28 to Tuesday, traders said, citing a report from market intelligence firm Genscape.
"There's a lot of uncertainty right now. We don't have a clear picture on" Iran, Jeff Currie, global head of commodities research at Goldman Sachs, told CNBC's "Squawk on the Street" on Wednesday.
"If you have a sustainable loss in Iran, $90 to $100 is a potential outcome here, but we don't know at this point what's going to happen to Iran."
Currie believes the rally has gone too far too fast, and forecasts Brent will settle back into a range of $70 to $80 a barrel before the year ends.
On Wednesday, Saudi Energy Minister Khalid al-Falih said the kingdom was pumping near record levels and would raise output in November. Saudi Arabia is one of the few countries with the ability to significantly raise output.
Wednesday's rally showed that traders are calling Saudi Arabia's bluff that it has enough spare capacity, said Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions.
The market "is pricing in a future problem (tight supplies) whereas data-dependent OPEC is reacting to current supply conditions (which are still adequate)," Essner said in an email.
— Reuters contributed to this story.