Oil prices eased from record highs on Monday as victory for Venezuelan President Hugo Chavez in a referendum on his rule eased fears that unrest could upset the country's oil exports.
Further disruption to Iraq's oil exports and warnings that Russian company Yukos financial crisis could ultimately cut into oil shipments supported prices, which have set new records in all but one of the last 12 trading sessions.
US light crude oil for September settled down 53 cents at $46.05 a barrel, off an early peak of $46.91 a barrel, a new high in the 21-year history for the New York Mercantile Exchange contract. London Brent was down 21 cents at $43.67 a barrel, after hitting a new record at $44.11.
The modest declines came after Venezuelan President Chavez survived a weekend recall referendum, which eased the threat of disruption to the country's crude exports.
National Electoral Council President Francisco Carrasquero said in a national broadcast that the "No" option opposing Chavez's recall had won just over 58 percent of the vote, while the "Yes" vote won nearly 42 percent. Former US President Jimmy Carter, who led a team of international observers monitoring the referendum, said Chavez won the vote fairly, despite opposition concerns over fraud.
Energy markets had been worried about disruptions to the country's oil production of 2.6 million barrels per day, if a disputed result sparked social unrest. Shipping sources had said shipments from Venezuela, the worlds fifth-largest crude exporter, were running smoothly.
Prices were bolstered as Shiite militia fighting US forces set fire to an oil well in southern Iraq, a new tactic as part of a Shiite campaign to target oil infrastructure.
Iraq's oil exports already had been halved to around 900,000 bpd after saboteurs blew up a pipeline a week ago and a US offensive against the followers of anti-US cleric Moqtada al-Sadr spread to several Iraqi cities.
And concern lingered that supplies from Yukos, Russia's biggest producer, would suffer as the authorities pursue payment of multibillion-dollar tax arrears.
Yukos Chairman Viktor Gerashchenko told Reuters the company would be allowed to produce and sell oil until the end of September and would try to avoid bankruptcy for as long as possible.
Volgotanker, the company that ships Yukos oil by river, said on Monday it was not prepared to ship crude on credit, although transport fees have been paid until the end of August.
Oil is up more than $10 a barrel since the start of the year. In real terms, adjusted for inflation, prices are still well below 1980s peak of $80, following the Iranian revolution. But average prices for the year to date are near matching those of 1974, the first oil shock, when crude averaged an inflation-adjusted $43 during the Arab oil embargo.
While leading economies have managed to cope with higher prices, signs are emerging that rising energy costs are starting to hurt. Germanys Bundesbank said its economy may not be able to sustain the moderate growth rates of the first and second quarters in coming months and that further oil price rises would pose a "serious risk."