OPEC's weekly average crude oil price dropped to 68.12 U.S. dollars per barrel on Monday, 3.60 dollars lower than the historical high of 71.72 dollars per barrel in the previous week, the cartel's secretariat said on Monday.

Driven by British Petroleum's (BP) decision to cease one of its oil fields in Alaska, the Organization of Petroleum Exporting Countries's (OPEC's weekly oil prices consecutively hit record levels in the last two weeks.

Market analysts believed that OPEC's forecast of the increase in world crude oil supply in 2006 and 2007 was the main reason for the drop in oil prices.

In OPEC's latest world oil market report, world oil demand is estimated to grow from 1.3 million barrels per day (bpd) to an average of 84.5 million bpd.

Non-OPEC oil supply in 2007 is expected to reach an average of 53 million bpd, representing an increase of 1.8 million bpd over 2006. The estimated demand for OPEC crude oil in 2007 is expected to drop from an average of 29.1 million bpd in 2006 to 28.3 million bpd.

Iran, the fourth largest crude oil producing country, declared that on Tuesday it would officially reply to the new package of incentives put forward by Russia, the United States, China, Britain, France and Germany, in the beginning of June, to solve it's nuclear standoff.

Market analysts believed that Iran's nuclear issue would dominate world oil prices in the coming week.

If the tensions of Iran's nuclear issue is not mitigated, and Iran stops supplying crude oil to the West as a reaction against proposed international sanctions, international oil prices might soar over 100 dollars per barrel.

Source: Xinhua