Crude oil prices dropped Monday after the Saudi oil minister said OPEC wanted to avoid fluctuating prices and as US Secretary of State Condoleezza Rice traveled to the Mideast to try to find a diplomatic solution to the violence in Lebanon and Israel.
Light, sweet crude for September delivery was down 22 cents to $74.21 a barrel in mid-afternoon Asian electronic trading on the New York Mercantile Exchange.
September Brent on London's ICE Futures exchange lost 20 cents to $73.55 per barrel.
On Sunday, Saudi Arabian Oil Minister Ali Naimi said the Organization of Petroleum Exporting Countries wanted to avoid "raising prices in a way that might affect the global economy," said.
"OPEC is concerned about the stability in the international market," he said after meeting his Nigerian counterpart Edmund Daukoru, who is also president of the 11-member OPEC.
In other Nymex trading, natural gas futures rose 4.1 cents to $6.180 while heating oil futures remained steady at $1.9580 a gallon. Gasoline futures were up marginally to $2.2930.
The sudden eruption of fighting between Israel and Hizbullah militants in Lebanon on July 12 lifted crude futures to a record $78.40 July 14, on fears that the fighting would escalate into a regional war and disrupt supplies, particularly from Iran, OPEC's No. 2 supplier and a backer of Hizbullah.
While oil prices have receded from recent highs after data showed that U.S. petroleum inventories grew across the board last week, worries about the Middle East crisis linger, although the market seems relieved that the conflict is not spreading.
Comments last week by US Federal Reserve Chairman Ben Bernanke also served as a moderating influence on the market.
Bernanke said Thursday "the increase in energy prices is clearly making the economy worse off both in terms of real activity and in terms of inflation."
If oil prices were to rise another $10 or $15 a barrel, there would be "significant consequences" for the US economy, he added. He said high energy prices are already hurting the economy, "in terms of real activity and in terms of inflation."