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Oil eases below $124 per barrel

business Updated: May 13, 2008 08:36 IST

World oil prices on Tuesday eased further, trading below $124 a barrel as a firmer dollar encouraged profit-taking in a market that remains well-supported, analysts said.

New York's main oil futures contract, light sweet crude for June delivery, was 37 cents lower at $123.86 from $124.23 at the close of trading in New York on Monday.

The benchmark contract traded lower for most of the New York session, but struck a record intraday high of $126.40.

Brent North Sea crude for June delivery was 14 cents lower at $122.77 a barrel after a drop of $2.49 to $122.91 dollars on Monday.

Oil prices have more than doubled in the past year and have rocketed 25 per cent since the start of the year, when they broke the $100 barrier.

Analysts cite a variety of factors for the price spikes, including rising energy demand from Asian powerhouse economies China and India, a weak US dollar and OPEC's refusal to pump more crude.

Mike Fitzpatrick, an analyst at MF Global, said that with the US dollar's strengthening more recently, "it is hardly a surprise to see oil prices backing off."

A stronger greenback makes dollar-priced crude more expensive for holders of other currencies.

In Asian morning trade the euro was at $1.5515, down from $1.5542 in late New York trades on Monday, and from the record of $1.