Oil slips to near $143, eyes dollar, Iran

07.07.08, 4:32 AM ET

United States - * Oil trades near $143 a barrel, up almost 50 percent this year * Dollar at one-week high against basket of major currencies * Iran vows to pursue its uranium enrichment programme (Previous PERTH, updates prices)

LONDON, July 7 (Reuters) - Oil eased to near $143 a barrel on Monday as the dollar strengthened, but losses were limited by concern over oil producer Iran's dispute with the West over its nuclear programme.

Iran on Saturday vowed to pursue its enrichment programme, saying it had no intention of discussing its "right to enriching uranium," keeping alive political tensions in the Middle East and adding to supply worries.

"Geopolitical concerns are still supporting oil prices," said Toby Hassall, analyst at Commodity Warrants Australia in Sydney.

"Apart from Iran, oil prices will also be dependent on the U.S. dollar movements and the U.S. equity markets this week."

U.S. crude traded at $143.35 a barrel by 0826 GMT, down from dealing late on Friday. Brent crude fell 37 cents to $144.05.

The New York Mercantile Exchange did not issue an official Friday closing price due to the July 4 holiday.

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

Strength in the U.S. dollar can reduce the appeal of oil and other commodities to investors as a hedge against inflation.

Oil hit a record $145.85 on Thursday, but eased fell as traders anticipated easing tensions between Iran and the West after Tehran responded to a package of incentives to try to resolve the dispute.

The market has gained almost 50 percent this year, driven partly by tension over Iran's nuclear programme and expectations that global oil supply will fail to keep pace with demand growth from China and India. (Additional reporting by Fayen Wong; editing by William Hardy)
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