NEW YORK - Oil prices tumbled nearly $4 a barrel Monday, erasing many of last week's record gains in a single session as concerns about potential supply disruptions eased.
Light, sweet crude for August delivery fell $3.92, or about 2.7 percent, to settle at $141.37 on the New York Mercantile Exchange. Earlier, the contract sank as low as $139.50, or $5.79 below Thursday's settlement price.
Traders drove prices sharply higher at the end of last week as they bet that conflict with Iran or some other event could cut supplies, and they didn't want to get caught unprepared over the three-day July 4th weekend, analysts said.
As concerns about supply disruptions subsided, many traders on Monday sold off contracts they had bought as insurance last week.
"We got through the holiday without any major news," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "No news is good news, or in this case, no news is bearish news."
After the last few weeks' run-up, however, analysts were skeptical that the drop signaled the start of a long-term decline. Prices set records in each of the previous six sessions.
"We're just moving into a new and higher trading range" of about $140 to $146 a barrel, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill. "We'll probably consolidate there for a week or two ... then probably push back into new record territory."
A gallon of regular gasoline now costs $4.108, a tenth of a penny more than the previous day's high, according to AAA, the Oil Price Information Service and Wright Express.