World oil prices retreated today after OPEC said it had the capacity to ramp up production by up to 1.5 million barrels a day.
New York's benchmark contract, light sweet crude for delivery in
September plunged $1.32 to close at $42.83 a barrel.
Brent North Sea crude for September delivery skidded 94 cents to
$39.70.
Oil prices had earlier climbed to record levels, driven by global consumption and a warning from OPEC that there was no spare production capacity to increase supplies.
New York crude reached a new historic peak of $44.30 while London's Brent contract hit $40.99, breaking through a previous best of $40.95 seen in October 1990 after the Iraqi invasion of Kuwait.
OPEC President Purnomo Yusgiantoro clarified today that OPEC continues to hold, at present, a spare production capacity
of around one to 1.5b barrels a day, which would allow for a immediate additional increase in production.
The OPEC president was quoted as saying that member countries have plans in place to further increase production capacity by around one million barrels a day towards the end of this year and in 2005.
The high level of oil prices continues to cause concern about global economic growth.
The US has said high energy prices helped push consumer spending to its biggest fall in nearly three years in June, as shoppers cut back sharply on car purchases.
Oil prices have risen by more than one-third since the end of 2003 on worries that accelerating demand in countries such as China has left supplies tightly stretched with little room for manoeuvre should any disruption occur.
The Consumer Association of Ireland has called for a reduction in fuel taxes amid fears of oil price increases.
The Association's chairman, Dermot Jewell, said more than two thirds of the price of fuel was made up of taxation and a reduction would greatly benefit motorists.
