Abu Dhabi: Crude oil futures for March delivery on the New York Mercantile Exchange fell below the psychological $100 per barrel on Wednesday after touching a new all-time high of $100.10 a day earlier on a sliding dollar and fears the Organisation of Petroleum Exporting Countries (Opec) may cut output at its next meeting, to be held on March 5.
Tuesday's record high was the third time oil has crossed $100, breaching the previous record high of $100.09 a barrel on January 3.
US oil slid $1.19 to $98.82 a barrel by 1435 GMT yesterday, having risen nearly five per cent, or $4.51, to a record peak of $100.10 on Tuesday. London Brent crude fell $1.45 to $97.11.
The oil market has also been highly volatile this week because of a quarrel between Venezuela, a key Opec producer, and ExxonMobil.
Venezuelan president Hugo Chavez said on Sunday that the state could sue Exxon for unpaid oil taxes and he repeated threats to cut oil sales to the US.
The market is also worried about supplies from Russia after Lukoil halted supplies to German refineries in February over a pricing dispute and uncertainty regarding Nigerian and Venezuelan supplies.
Opec has said it thinks there is enough oil in the market and there have been indications it may announce a cut in supplies as the winter demand for oil in the northern hemisphere eases.
The combined Opec supply in January was 32 million barrels per day, unchanged from December.
A source at Opec headquarters in Vienna told Gulf News that speculation not-withstanding, any clear signal on Opec policy will emerge only as its March meeting approaches.
Going forward, oil market analysts say the market has serious concerns about oil supplies.
"I don't see a dramatic fall in oil prices in the near-term. The market is looking pretty tight on both products and crude," said Kate Dourian, Middle East editor of energy information provider Platts.
"A weakening dollar, developments in Venezuela and Nigeria and problems with US refineries, which are keeping the supply of refined products tight in the world's biggest oil consuming nation, are factors that will prevent a dramatic fall in oil prices in the short term."
