Oil slipped on Monday as traders took profits from crude's biggest one-day jump ever, but OPEC's resistance to pumping more oil kept prices near their latest record high.
United States light, sweet crude for July delivery fell 93 cents to $137.61, softening as the dollar rebounded and the threat of economic damage from high costs mounted, Reuters reported.
Traders gave up little of the unprecedented $10.75 surge on Friday, when oil hit a new record of $139.12 amid frenetic buying triggered by the slumping dollar and comments by an Israeli minister about a possible attack on Iran, the world's fourth-largest producer.
A forecast by investment bank Morgan Stanley that oil prices could top $150 a barrel by the July 4 United States holiday added to Friday's speculative fever, taking two-day gains to more than $16 a barrel and reversing two weeks of losses.
Oil's six-year-long rally has gathered pace this year, with prices rising about 40 percent since January as funds hedge against the dollar and some bet that long-term oil supplies will struggle to keep up with demand in the decades ahead.
Oil's direction has also become increasingly intertwined with the dollar, which edged up against the yen on Monday. The greenback slumped on Friday after data showed the U.S. economy lost jobs for the fifth straight month and the unemployment rate shot up to its highest in more than three years.
The rapid rise in oil prices is no good news for Turkey as it is likely to increase current account deficit further. In 2007 approximately 20.6 percent of Turkey's record current account deficit came from oil imports. Turkey'e current account deficit is expected to exceed 40 billion dollars in 2008 from 38 billion dollars.
OPEC: NO NEED TO PUMP MORE
At the weekend, key OPEC officials maintained they saw no need to consider pumping more oil now, despite the price surge and Australian Prime Minister Kevin Rudd's call for G8 nations to "apply the blow-torch" to force producers to pump more crude.
"I think there is enough oil in the market, I did not hear anybody calling for a meeting," Shokri Ghanem, head of Libya's National Oil Corporation and the country's top oil official, told Reuters in an interview.
OPEC, supplier of more than a third of the world's oil, is next scheduled to meet on September 9 to discuss oil policy.
While consumer nations have often urged the cartel to tame prices by pumping more crude, Group of Eight energy ministers meeting in Japan at the weekend focused on domestic efficiency and technology as the long-term solution to record oil, refraining from a call to pump more crude now.
OPEC ministers have repeatedly blamed speculation and other factors for the surge in prices. BP CEO Tony Hayward said the rise reflected imbalanced fundamentals.
"In a well functioning market where supply and demand are balanced, prices should be stable. Where prices are high, however, they show that supply is not responding adequately to rising demand," he told a conference in Kuala Lumpur.