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 long Independence Day weekend, analysts said. There was no floor trade Friday in the U.S. because of the July Fourth holiday.
As concerns about supply disruptions subsided, many traders on Monday sold off contracts they had bought as insurance last week.
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."
