LONDON, July 7: Oil prices dived below $140 a barrel on Monday as the US currency firmed and tensions eased over major crude producer Iran, analysts said.New York’s main oil contract, light sweet crude for August delivery, slumped $5.64 to $139.65 a barrel in pit trading. The contract had punched a life-time high of $145.85 on July 3.

On Monday, Brent North Sea crude for August fell $3.83 to $140.60 a barrel in electronic deals. Brent had struck a record high 146.69 dollars last Thursday.

US floor trading had shut last Friday owing to Independence Day in the United States.

Oil futures slid on Monday, “with New York catching up with Brent as traders in America were coming back to work after a long holiday weekend,” said Sucden analyst Andrey Kryuchenkov.

“The greenback was stronger (on Monday), extending gains from the end of last week and helping to put more pressure on oil prices,” he added.

A strengthening US currency makes dollar-priced crude more expensive for buyers using weaker currencies, dampening demand for oil.

The dollar rallied against major currencies on Monday after US President George W. Bush, speaking over the weekend ahead of a Group of Eight (G8) summit in Japan, said his administration backed a “strong” dollar.

Oil blazed a record-breaking trail last week, driven by geopolitical tensions over Iran, a weaker US dollar and tightening global supplies, traders said.—AFP