New York’s main contract, light sweet crude for delivery in April, dropped 62 cents to $106.10 a barrel.
Brent North Sea crude for April lost 73 cents to $123.07 in London late morning trade.
Analysts said Iraq’s announcement on Monday that its daily oil production had reached more than three million barrels — the country’s highest amount since 1979 — has weighed on prices.
“In a series of negative supply side news lately, with Iran at the top of the agenda followed by supply outages in South Sudan, Syria, Yemen and supply problems in the North Sea, this (Iraq news) eventually is something to cheer about,” said Nordea Markets commodities strategist Thina Margrethe Saltvedt.
Iraq’s Oil Minister Abdelkarim al-Luaybi told AFP that the country planned on increasing oil production and exports this year to 3.4 million barrel per day and 2.6 million bpd, respectively.
Oil prices are also being weighed down by weak economic figures out of Europe and China, analysts said.
Phillip Futures in a market commentary said oil prices were “in tug-of-war trading as supply risks and tensions over Iran’s nuclear programme provided support, but concerns about global economic growth limited gains.”
Israel’s Prime Minister Benjamin Netanyahu told US President Barack Obama on Monday that Israel must remain the “master of its fate” in a firm defence of his right to mount a unilateral strike on Iran.
Israeli leaders are worried that despite their potency, increasingly tough US and European sanctions on Iran and its central bank and vital petroleum industry will not convince Tehran to renounce a nuclear arsenal.
Israel is eager to move quickly and decisively using a military strike before Tehran reaches a point when it could quickly produce weapons-grade uranium.
Iran has so far insisted that its nuclear programme is solely for peaceful civilian purposes.