Oil slipped from a record high above $143 a barrel today as weak US demand countered mounting tensions between OPEC nation Iran and Israel.
US crude settled 21 cents lower at $140.00 a barrel, after hitting an all-time high of $143.67 earlier. London Brent crude settled 48 cents lower at $139.83.
The US Energy Information Administration revised downward US April oil demand by 863,000 barrels per day to 19.77 million bpd -- 3.9 per cent below year-ago levels -- as surging fuel costs erode demand in the world's top consumer.
The revision showed April demand was the lowest for the month since April 2002, and came even before gasoline prices scaled to new highs in June.
Earlier, crude prices rushed to a fresh high on the weaker dollar and escalating tensions between Iran and Israel over Tehran's nuclear program.
Iran's Revolutionary Guard said Saturday Tehran would impose controls on shipping in the Persian Gulf and Strait of Hormuz, if it were attacked. Roughly 40 per cent of the world's traded oil flows though the narrow waterway separating Iran from the Arabian Peninsula.
The US Navy's Fifth Fleet said today the United States and its allies would not allow Iran to hamper shipping in the Gulf. Iran's foreign minister said Sunday he did not believe Israel was in a position to attack.
Tehran's dispute with the West over its nuclear development program has supported the 40 per cent rise in oil prices this year, as has an influx of cash from investors seeking to hedge against inflation and the slumping US dollar.
Oil prices have jumped nearly seven-fold since 2002 as part of a broader commodities rally sparked by surging demand from emerging economies like China and India.
Inflation in the euro zone rose to a record high of 4 per cent in June, data showed today.
High fuel prices have hit the economies of some consuming nations, prompting some countries including the United States to call on OPEC to increase output.
Saudi Oil Minister Ali al-Naimi reiterated his country's position that oil prices were being driven mostly by speculation and said the OPEC kingpin was prepared to supply all the oil its customers needed.
The heads of some of the biggest oil companies, gathered at an oil conference in Madrid, said fundamentals, not investor flows, were the main driver of prices.