Oil falls for third straight day

Lack of bullish news leaves investors waiting for Energy Department's inventory report and Saudi-organized summit.

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By Kenneth Musante, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- Oil prices drifted lower Tuesday after retreating from an all-time high of nearly $140 a barrel a day earlier.

U.S. crude for July delivery fell a modest 60 cents to settle at $134.01 a barrel on the New York Mercantile Exchange - oil's third negative close in a row.

On Monday, oil rose to a new intraday record of $139.89 before settling down 25 cents.

The lack of any bullish news, coupled with traders trying to lock in profits before the July contract expires Friday, have left prices in limbo, according to Phil Flynn of Alaron Trading in Chicago.

"I think we're in wait and watch mode," he said.

Saudi Arabian summit: Oil prices may drift until the Energy Department releases its inventory report on Wednesday and Saudi Arabia's summit on oil prices Sunday, according to Stephen Schork, publisher of oil industry newsletter The Schork Report.

Just three days after oil rose $11 a barrel, the largest single-day jump in history, Saudi Arabia called for a meeting with oil-producing and oil-consuming nations in the city of Jeddah to discuss out-of-control oil prices.

Investors may also be taking a second look at the announcement Saudi Arabia made over the weekend. The world's largest oil producer said it would increase output by 200,000 barrels a day.

"People could be saying now that...maybe a little extra oil wouldn't hurt the situation," said Flynn.

Dollar fails to move the market: The dollar fell slightly against the euro Tuesday, but the decline wasn't enough to be significant, traders said. Oil is traded in dollars, and a weak dollar makes it cheaper for foreign consumers to buy.

Gasoline ends streak: Meanwhile the price of gasoline at the pump came off its record-setting streak, falling two-tenths of a cent to $4.078 a gallon, according to a daily survey by motorist advocacy group AAA. Average gasoline prices hit record highs for 9 consecutive days, peaking at $4.08 a gallon Monday.

The price of refined gasoline remains up nearly 36% over the same period in 2007. To top of page

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