Oil prices eased further below $40 a barrel today as an OPEC deal to pump more crude outweighed underlying fears of political instability in top producer Saudi Arabia.
US light crude fell 45 cents to $38.83 a barrel, following an 80-cent drop yesterday when OPEC agreed a two-stage output increase of 2.5 million barrels a day in July and August.
Brent crude in London was down 41 cents at $35.99 a barrel.
But oil dealers were served a sharp reminder of the risks to supply security in the Middle East that pushed crude to a 21-year high earlier this week.
Al-Qaeda's leader in Saudi Arabia praised an Islamic militant attack in the Saudi oil city Khobar for its impact on world oil prices.
"The operation in Khobar was a new victory which God bestowed upon the mujahideen and which put the Saudi government in a deep crisis," Abdulaziz al-Muqrin said in a statement on an Islamist web site.
"It took the price to its highest levels of over $42, while Saudi Arabia is committed to America's prosperity by providing oil at the cheapest prices."
US crude futures struck a 21-year peak of $42.45 after the Saturday attack on Western oil workers killed 22.