Oil Prices Decline Below $141 A Barrel As Dollar Strengthens

New York, NY (AHN) - Crude oil fell below the $141-a-barrel mark in electronic trading on Monday as tensions with Iran eases.

One reason for its decline could be news that Iran may not disrupt supplies over nuclear issues .

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

Thursday, oil futures jumped to an intraday record high of $145.85 a barrel setting a new record amid rising Middle Eastern tensions and signals to global markets that the prices might rise further.

On Monday, crude was down by $4.71 or 3.2 percent at $140.58 a barrel in electronic trading on the New York Mercantile Exchange.

Until July 3, oil prices had 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.

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

With the rising oil prices, shares of automobile and airline sectors had also remained low. The companies have been forced to reduce their earnings outlook and increase debts due to the rising oil rates and inflation fears.

In currency trading, the yen weakened and changed hands at 107.68 yen per U.S. dollar in Asia. In New York on late Thursday, the Japanese currency was at 106.80 yen against the dollar.

The euro also declined to $1.5611 against the dollar, which is the lowest level since June 25, before it retreated to $1.5637 during early morning trading in New York, compared to $1.5697 late Friday.

In other commodities, gold futures decreased sharply on Monday, falling by as much as $15.10 to $918.50 an ounce on the New York Mercantile Exchange.

Heating oil prices for August delivery decreased by as much as 4.1 percent, while gasoline rates moved down by as much as 3.8 percent on Monday.

Brent North Sea oil for August delivery declined $2.23 or 1.5 percent to $142.19 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 during last week, raised warnings for the eleven leading oil consumers as the global economies weaken due to subprime mortgage turmoil in the U.S. markets.

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.

Meanwhile, OPEC President Chakib Khelil also indicated concerns stating that the rising oil rates may not fall easily as countries like China and India have strong demand.