NEW YORK (Reuters) - Oil sank nearly a dollar on Tuesday after a U.S. report downplaying Iran's nuclear program eased geopolitical concerns and economic worries in the world's top consumer continued to weigh on demand growth prospects.

The losses added to a drop which has knocked oil from peaks over $99 a barrel in late November and came as OPEC ministers gathering in Abu Dhabi for a Wednesday meeting insisted supplies are sufficient to meet winter demand.

U.S. crude settled down 99 cents to $88.32 after tumbling as low as $87.34 earlier. London Brent crude settled 27 cents lower at $89.53 a barrel after ending above U.S. oil for time since August 23 on Monday.

Concerns U.S. oil demand growth could be hit by the subprime mortgage crisis, which helped send prices down 10 percent since peaking at $99.29 on November 21, continued to fuel bearish market sentiment.

A new U.S. intelligence report by the National Intelligence Estimate (NIE) saying Iran halted its nuclear weapons program in 2003, contradicting the Bush administration's earlier assertion that Tehran was intent on developing a bomb, also helped push prices down on Tuesday.

"The chances of a unilateral or pre-emptive strike on Iran decreases with the NIE's announcement and make it much more difficult for the Bush administration to go down that path, so I think it is near-term bearish for prices," said Eric Wittenauer, analyst at AG Edwards.

Tensions between Tehran and Washington have supported prices in the record rally that sent prices up 40 percent from August to late November, which was sparked by concerns of a supply shortfall ahead of the Northern Hemisphere winter.