The fall was reflected in an easing of local pump prices on Thursday, with petrol at the major pumps down about 4c per litre.
Oil prices around the world at about midday yesterday were at $US135.06 for UK Brent futures, Dubai at $US131.02 and West Texas international at $US129.40, Reuters reported.
Speculation is mounting that further price falls may filter through at the pump.
ABN Amro Craigs broker Peter McIntyre said the retreat in oil prices was driven by several factors, including confirmation of a higher inventory of oil and distillates in the United States than expected and indications of a worldwide slowing in economic growth which is expected to decrease oil demand.
"For the past 12 months, oil hasn't been treated so much as a commodity but as a currency.
It has been fashionable because [share] equities have been down," Mr McIntyre said.
About 10%-15% of the rise in prices, up six-fold since 2002 and 30% this year alone, has been apportioned to speculators in the market and a weakening in price may see those speculators retire from the market, Mr McIntyre said.
During the week, New Zealand Oil and Gas, whose shares have enjoyed a stellar run gaining almost 50% in value during the past year, declined more than 2% to trade around $1.62 yesterday after it abandoned the offshore Taranaki Momoho exploration gas well.
The well, reported to be worth up to $50 million, was capped after only small signs of gas condensate were found.
NZOG raised a total $192.7 million in working capital following the exercise of stock options - boosting its market capitalisation by about $200 million to $650 million at the time.
NZOG chief executive David Salisbury said in a statement yesterday the raising of capital, alongside strong revenue flows from its share in the offshore Taranaki Tui oilfield, gave the company opportunity to aggressively pursue "sensible investment opportunities in the oil and gas sector".
Aside from a 12.5% stake in the Tui field and a further 15% in the development Kupe field in Taranaki, it maintains a 30.63% stake in specialist coal-miner Pike River Coal, a subsidiary NZOG spun off and floated in May 2007.
