Oil drops below $141 a barrel

London: Oil retreated to below $141 a barrel on Monday, taking a pause from a record-breaking rally that has lifted prices by almost 50 per cent this year.

Investors were eyeing mixed signals from Iran, the world's fourth-largest oil exporter, in its dispute with the West over its nuclear work, and a rise in the value of the dollar.

"The market had been trending sideways for a while and now there's a break downwards," said Christopher Bellew, senior oil broker at Bache Commodities.

"Once it made a break below Friday's lows, that probably sparked off a bit of technical selling."

US crude traded at $140.77 a barrel by 1320 GMT, below Friday's intra-day low of $143.22. Brent crude fell $2.90 to $141.52.

On Monday, the dollar reached a one-week high against a basket of major currencies, benefiting from a European Central Bank tone that has reduced expectations of further interest rate rises.

Leaders of the Group of Eight nations gathering for a summit in Japan fear further oil price rises, Italian Prime Minister Silvio Berlusconi said on Monday.

"There are fears oil prices could increase further. Some people fear they could reach $200," Berlusconi told reporters on the sidelines of the summit.