Oil fell nearly $2 to below $87 a barrel today as financial markets tumbled on growing concerns over the health of the U.S. economy, triggering a correction from recent record highs.
This evening New York's main futures contract, light sweet crude for delivery in November, shed $1.85 to $86.75. The contract had struck a historic high point of $90.07 on Friday.
London's Brent North Sea crude for December delivery sank $1.31 to $82.48 on Monday after hitting a record high $84.88 on Thursday.
Profit taking was in evidence across commodities, as gold and other metals fell sharply.
The dollar bounced back from a record low against the euro, as European and Asian stocks fell sharply after a flurry of weak US corporate results sparked concerns the world's top economy was heading for a recession.
US oil has rallied more than 10% since 8 October, climbing towards the inflation-adjusted high of $101.70 hit in April 1980, a year after the Iranian revolution.
A weak dollar and surging energy costs have increased worries over the health of the US economy, already battered by the crisis in the subprime mortgage sector.
Despite oil's slide from last Friday's all-time high, analysts said confrontation between Turkey and Kurdish rebels in northern Iraq continued to offer underlying support, although signs of a possible lessening in tensions emerged on Monday.
The Kurdish rebels fighting Turkish troops near the Iraqi border will announce a ceasefire on Monday evening, Iraqi President Jalal Talabani's office said.
