Crude Prices Drop By More Than $1

New York, NY (AHN) - A light sweet crude barrel for August delivery fell below $144-a-barrel mark in electronic trading on Friday.

One of the reasons for its decline is being speculated that Iran may not disrupt supplies over nuclear program issues as it gave a constructive response to incentives offered by the international group.

Iran's commander of Revolutionary Guards had warned that if Israel attacks his country, Tehran would retaliate with several missiles.

Oil futures had jumped to an intraday record high of $145.85 a barrel over Middle Eastern tensions on Thursday, sending signals across the global markets that the prices may rise further.

The contract surged by $1.72 to $145.29 a barrel on New York Mercantile Exchange on Thursday as the U.S. markets reacted to the weekly gains.

On Friday, crude was trading down by $1.41, or 1 percent, to $143.88 a barrel in electronic trading on the New York Mercantile Exchange.

There was no floor trading Friday in New York as the U.S. markets are closed for the Fourth of July holiday.

So far, oil prices have gone up by 3.6 percent this week, 55 percent since the start of this year and by more than 80 percent over the period of 12 months.

With the rising oil prices, shares of automobile and airline sectors also tumbled. The companies are being forced to cut down their earnings outlook and increase debts due to the untamable oil rates and rising inflation aftermaths.

In currency trading, the yen changed hands at 106.72 yen per U.S. dollar in Asia. In late New York on late Thursday, the Japanese currency was at 106.07 yen against the dollar.

Brent North Sea oil for August delivery declined $1.15 to $144.93 a barrel on the ICE Futures exchange, after it surged to a life-time high of 146.69 dollars a barrel on Thursday.

The rally in energy prices continued during the week, raising warnings for the eleven leading oil consumers as the global economies weaken due to subprime mortgage turmoil in the U.S. markets.

On Thursday, Saudi Arabian Oil Minister Ali al-Naimi expressed concerns over the rising prices in Madrid and said that it may not further increase its production.

Saudi Arabia raised its oil production by 300,000 barrels a day in the month of May, while the delegates from the oil ministry confirmed that they would add another 200,000 barrels a day in July.