Oil prices fell below $68 in New York this evening, though losses were limited by lingering supply concerns despite Saudi Arabia's offer to provide the market with extra crude.
New York's main contract, light sweet crude for delivery in March, dropped 25 cents to $67.85 a barrel in pit deals. In London, the price of Brent North Sea crude for March delivery lost 11 cents to $66.05 a barrel in electronic trading.
Crude futures had soared above $69 a barrel in New York for the first time in more than four months yesterday on supply disruptions in Africa's biggest oil exporter Nigeria and tensions in Iran - the world's fourth biggest producer of crude and second largest in OPEC.
Analysts said that prices fell today on profit-taking as top exporter Saudi Arabia promised yesterday that it will supply extra oil if needed. Amid concerns over global energy supplies, Saudi Arabia's Oil Minister Ali al-Nuaimi said in an interview with Indian television that the oil kingpin was ready to boost supplies to 11 million barrels a day from 9.5 million.
Supply concerns caused New York's main contract to strike an intra-day peak of $69.20 a barrel yesterday - the highest level since September 2005 - before closing down 38 cents at $68.10.
Unrest in Nigeria has led so far to lost production of some 200,000 barrels of crude a day and this, coupled with Iran's diplomatic wrangling with the West over its nuclear programme, sent crude prices soaring over the past week. Crude oil futures had hit historic high prices in nominal terms last August.
Following the devastation wrought by Hurricane Katrina on US Gulf Coast energy installations, prices struck $70.85 a barrel in New York and $68.89 in London.
