Source AP ©

Oil prices fall below 145 dollars per barrel

Oil prices fell below US$145 a barrel Friday as the U.S. dollar strengthened slightly against the euro and the Japanese yen.

Suggestions by Saudi Arabia's oil minister that his country doesn't plan to boost production helped bolster prices earlier in the session.

Trading volumes were lower than usual as markets were closed in the U.S. for the July 4 holiday.

By midday in Europe, light, sweet crude for August delivery was down 85 cents to US$144.44 a barrel in electronic trading on the New York Mercantile Exchange.

Crude futures rose to US$145.85, a record high, in New York on Thursday before settling at a record finish of US$145.29 a barrel.

In London, Brent crude futures fell 89 cents to US$145.19 a barrel on the ICE Futures exchange.

Oil prices have risen more than 50 percent so far this year.

Saudi Arabian Oil Minister Ali Naimi said Thursday in Madrid that the world's biggest oil exporter had no immediate plans to boost crude output because there was no need to do so.

Naimi said Saudi Arabia is ready to raise production if the kingdom determines supply-and-demand fundamentals have changed. But for now, "all our buyers are satisfied and happy," he said.

Gains by the dollar Thursday against the euro helped keep oil prices from rising further. The greenback strengthened after the European Central Bank raised its benchmark interest rate an expected quarter point but signaled it didn't expect additional rate hikes that might further boost the euro.

On Friday, the dollar was stronger against the euro at US$1.5694 compared to US$1.5699 a day earlier and it also gained to 106.81 Japanese yen from 106.77 yen late Thursday.

A falling dollar has helped boost oil prices this year as investors often buy commodities such as oil as a hedge against inflation when the greenback weakens. Also, a struggling dollar makes oil less expensive to investors overseas.

Oil prices are rising amid a drop in stock prices worldwide, with the major stock market indices all down by double digits since the start of the year.

Recent saber-rattling in the Middle East is another reason for this week's increase. Traders are concerned that a conflict with Iran could disrupt tight global supplies.

In other Nymex trade, heating oil futures fell 1.85 cents to US$4.0875 a gallon (3.8 liters) while gasoline prices were down 0.74 cent to US$3.5636 a gallon. Natural gas futures rose 2.9 cents to US$13.606 per 1,000 cubic feet.

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