Oil prices fell today as the dollar gained strength and expectations increased that US supplies are rising.
In London, Brent crude dropped $1.27 to $123.85 per barrel, while in New York benchmark West Texas Intermediate crude for June delivery fell 91 cents to $112.61 per barrel.
US Energy Department is likely to say tomorrow that crude oil supplies grew last week and this also pushed down the price. Analysts expect that US oil supplies increased by 1.7 million barrels.
Energy markets are still assessing what, if any, impact the death of Osama bin Laden will have on global supplies and prices. There is concern that extremists may try to attack oil fields and pipelines to retaliate for US forces killing bin Laden in Pakistan on Sunday. But some analysts point out that the Federal Reserve's policies have had more influence on oil prices than bin Laden.
The Fed has kept short-term interest rates near zero, weakening the dollar as investors seek higher returns in other currencies. This has helped push oil prices up about 48% in the past year, from $76 a barrel in May 2010.