World oil prices fell today reversing earlier gains, after US President George Bush announced a decision to suspend deposits into America's strategic oil reserves.
Earlier today, prices had raced towards record highs owing to tensions in major crude producers Nigeria and Iran.
New York's new main contract, light sweet crude shed 78 cents to $72.55 per barrel in pit trading after a high of $74 in electronic deals.
The contract had hit $75.35 per barrel on Monday - matching a record level which was struck last Friday on heightened concerns over the Iranian nuclear crisis, alongside news of weak US petrol supplies.
In London today Brent North Sea lost 35 cents to 72.65 dollars per barrel in electronic deals. Brent crude had struck a historic peak of $74.79 last Friday.
President Bush announced the suspension for several months of deposits into America's strategic oil reserves, in a bid to free up petrol for US consumers and help drive down soaring prices at the pump.
The US Strategic Petroleum Reserve was created in 1975 by then-president Gerald Ford to ensure an emergency supply of oil during that decade's price shocks created by war and tensions in the Middle East.
Demand for petrol hits top gear next month, when many Americans take to their cars on vacation for the so-called summer driving season in the United States.
President Bush also called on oil companies to give up billions of dollars' worth of tax breaks.
He said that, with oil prices at record levels, energy companies do not need all of the tax breaks they now get, and proposed eradicating billion dollars of tax write-offs over the next decade.
The US president also suggested that consumers bear part of the blame for the soaring cost of fuel, saying that 'the prices people are paying at the gas pump are a reflection of our addiction to oil'.
Traders are nervous of further supply outages in Nigeria, where around 20% of output is down owing to rebel attacks on energy infrastructures in the southern Niger Delta.
Disruptions to exports of Nigerian light sweet crude oil is of particular concern in the run-up to the US driving season which starts at the end of May.
In Iran, the head of national security chief Ali Larijani warned of the consequences for energy supplies should Iran be subjected to radical measures over the ongoing nuclear crisis.
The warning came ahead of Friday's deadline set by the UN Security Council for Iran to freeze ultra-sensitive uranium enrichment work.
