Oil prices turned negative in late Thursday trade, selling off early gains following a report that the European Union could delay a ban on Iranian exports by six months.

Prices dropped right after 2 p.m. EST after Bloomberg News reported the embargo: "will likely be delayed for six months to allow countries such as Greece, Italy and Spain to find alternative supply," citing an EU official with knowledge of the matter.

EU diplomats had said a consensus was emerging to grant a grace period before banning new deals with Iran -- six months for crude oil purchases and three months for petrochemicals. The embargo is the latest pressure from the West to curb Iran's nuclear program.

ICE Brent crude for February delivery settled down 98 cents at $111.26 a barrel, well off an earlier peak of $115.12, the highest level since Nov. 9.

U.S. February crude oil fell $1.77 to settle at $99.10 a barrel, off session highs of $102.98.

Oil had traded higher for most of the day after the main oil union of OPEC member Nigeria threatened shut output on Sunday as Africa's biggest oil producer entered its fourth day of nationwide protests over the loss of fuel subsidies.

(Additional reporting by Robert Gibbons, David Sheppard, Jeffrey Kerr and Matthew Robinson in New York; Yeganeh Torbati in London; Editing by Marguerita Choy)