Oil prices pull lower

Oil prices eased on Monday but remained at elevated levels after a long US holiday weekend, as traders mulled an offer from crude producer Iran to hold talks on its nuclear drive.

Brent North Sea oil for August delivery slid 17 cents to 144.25 dollars a barrel in electronic deals. That was not far off the record high 146.69 that was struck last Thursday.

New York's main oil contract, light sweet crude for August delivery, shed 1.66 dollars to 143.63 dollars on Monday. The contract had punched a life-time high of 145.85 on July 3.

US floor trading was shut last Friday but electronic trade continued amid the Independence Day holiday.

Oil blazed a record-breaking trail last week, driven by geopolitical tensions over Iran, the weak US dollar and tightening global supplies, traders said.

Sky-high oil prices -- which ramp up the cost of petrol, jet fuel, and domestic electricity and gas -- have triggered fears about higher inflation and slower economic growth. They have also sparked protests around the world.

Over the weekend, Iran offered to negotiate on its nuclear drive but without a freeze on uranium enrichment, in its first comments since responding to an international package aimed at ending the standoff.

EU foreign policy chief Javier Solana said Monday he hoped to meet later this month with Iran's top nuclear negotiator, after Tehran gave its response to a package of incentives to halt uranium enrichment.

"There is some kind of relaxing on the part of Iran," said Tony Nunan, a manager with Mitsubishi Corp's international petroleum business in Tokyo.

"So any kind of reduction in tension there will take some of the price pressure off."

Iran is locked in a standoff with the West over its nuclear energy programme. The Islamic republic claims it is for generating electricity while Western nations fear the development of nuclear weapons.

Elsewhere, the United States and Japan called Sunday for urgent action on red-hot oil and food prices that could derail the global economy.

Japanese Prime Minister Yasuo Fukuda said he and US President George W. Bush agreed on the need for urgent efforts to tackle the issue. Both are attending the G8 summit, which began in Japan earlier on Monday.