Crude prices drop after early gains

Crude oil prices went as high as $139.89, a gain of more than $5 over Friday’s close in early trade on Monday before ending lower on the session.

The gains came on a fire that was reported overnight on a North Sea drilling rig that could take as much as 150,000 barrels per day out of production, while the falling dollar encouraged buying among users of other currencies than the greenback.

Saudi Arabia’s announcement that they will increase production by 200,000 barrels per day to 9.7 million barrels per day in July after a 300,000 barrel per day increase in May seemed not to have much effect on traders early.

Still, by the close of floor trade on the New York Mercantile Exchange July contracts for West Texas Intermediate crude had dropped $1.17 from Friday’s close to $133.69 per barrel, while at last report Brent crude had dropped 93 cents to $134.11 per barrel on the ICE Futures Europe exchange in London.

Nymex July gasoline futures were down 3 cents to $3.43 per gallon while July heating oil added 7 cents to $3.91 per gallon and July natural gas was up 29 cents to $12.91 per million British thermal units.

Meanwhile, at-the-pump prices for regular unleaded gasoline in the United States averaged $4.08 per gallon, a gain of 0.3 cent overnight, while diesel fuel held steady at its record of $4.797 per gallon.