Crude oil futures prices dropped as traders sold contracts to gain profits from a record high near $106. Other investors bought oil to compensate for a falling dollar.
Despite the dollar's decline to its lowest price against the euro today, several analysts attributed losses in oil prices to the fact that investors usually sell contracts to take profits after a big gain. The increase has added 6.4 percent to the price of a barrel of crude in less than two days, the Associated Press reported.
The U.S. currency tumbled to a record low of $1.5372 against the euro, according to Reuters data. The dollar fell after European Central Bank President, Jean Claude Trichet, said euro zone inflation risks reduced the probability of a cut interest rates in the near future, Reuters noted.
U.S. crude futures for April delivery rose 95 cents, or 0.91 percent to $105.47 a barrel at 3:53 p.m. on the New York Mercantile Exchange at 3:38 p.m. in New York. Futures fell from a new record of $105.97 a barrel earlier.
Brent crude for April delivery also increased 95 cents, or 0.91 percent to $105.47 a barrel on LondonÂ´s ICE Futures Exchange.
Moreover, the Organization of Petroleum Exporting Countries helped prices when it announced yesterday that it will keep oil production steady.
U.S. President George Bush had called on OPEC to increase production in order to help stabilize crude prices.
Furthermore, tensions in South America between Venezuela, an OPEC member, and Colombia have provided support to the oil market. Yesterday Venezuelan President Hugo Chavez sent troops to his country's border with Colombia following an attack by Colombia over the weekend on FARC militants in Ecuadorian territory.
Ecuador is the only other member of OPEC in South America. Members of OPEC provide 40 percent of the total crude oil production in the world.