Oil prices lower on stronger dollar

World oil prices eased in Asian trading on Tuesday on the back of a slightly stronger US currency, dealers said.

New York's main contract, light sweet crude for August delivery, was off 41 cents to 144.77 dollars a barrel from Monday's close of 145.18 dollars at the end of US trading hours.

Brent North Sea crude for August delivery dropped 24 cents to 143.68 dollars a barrel.

"The dollar rally has put some downward pressure on oil," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

A strengthening greenback can make oil less affordable for buyers using other currencies, potentially curbing demand and crude prices.

But dealers expect a limited dip in crude prices because of supply concerns and geopolitical tension in the oil-rich Middle East over Iran's uranium enrichment programme.

Tehran insists its nuclear drive is aimed solely at generating energy, but some Western nations fear it could be aimed at making an atomic bomb and have called for a freeze of its uranium enrichment.

Dealers fear potential supply disruption from Iran in the event of conflict with the United States or Israel. Iran is the second-biggest crude oil producer in the Organisation of the Petroleum Exporting Countries (Opec) cartel.

"There is limited downside risk to oil pricing in the coming weeks because of supply-side concerns.... the situation over Iran remains fluid," said Shum.

A five-day strike by oil workers in Brazil against the state-run company Petrobras is also expected to exacerbate supply concerns, dealers said.

Petrobras said oil output was cut seven percent as the strike affected platforms offshore from Rio de Janeiro in the Campos basin, which provides 82 percent of the firm's daily 1.8-million-barrel output.

Brazil is the world's 12th largest crude producer.

"Recently, the oil complex has been driven by supply threats," analysts from Societe Generale said in a report, adding "tensions and rhetoric over the Iran nuclear programme continue to run high."

Oil prices have almost doubled over the past year and have soared since breaking through 100 dollars at the start of 2008. The record prices have sparked protests around the world amid fears for economic growth.