Oil retreated to below $141 a barrel today, taking a pause from a record-breaking rally that has lifted prices by almost 50 per cent this year.
Investors were eyeing mixed signals from Iran, the world's fourth-largest oil exporter, in its dispute with the West over its nuclear work, and a rise in the value of the dollar against other major currencies.
"The market had been trending sideways for a while and now there's a break downwards," said Christopher Bellew, senior oil broker at Bache Commodities.
"Once it made a break below Friday's lows, that probably sparked off a bit of technical selling."
US crude traded at $140.77 a barrel by 1.20pm, below Friday's intra-day low of $143.22. Brent crude fell $2.90 to $141.52.
The New York Mercantile Exchange did not issue an official Friday closing price due to the July 4th holiday.
Today the dollar reached a one-week high against a basket of major currencies, benefiting from a European Central Bank tone that has reduced expectations of further interest rate rises.
Strength in the US dollar can reduce the appeal of oil and other commodities to investors as a hedge against inflation.
Oil in New York hit a record $145.85 on Thursday, but later eased as traders anticipated lessening tensions between Iran and the West after Tehran responded to a package of incentives to try to resolve the dispute.