New York's main contract, light sweet crude for delivery in March, dropped 68 cents to 67.42 dollars per barrel in electronic trading.

In London, the price of Brent North Sea crude for March delivery lost 55 cents to 65.61 dollars per barrel

On Monday, crude futures had soared above 69.0 dollars per barrel in New York for the first time in more than four months on supply disruptions in Africa's biggest oil exporter Nigeria and tensions in Iran -- the world's fourth biggest producer of crude and second largest in OPEC.

Prices later "fell on profit-taking as top exporter Saudi Arabia promised yesterday (Monday) that it will supply extra oil if needed", analysts at the Sucden brokerage firm said in London.

"However falls are expected to be fairly limited as a result of supply concerns," they added.

Saudi Arabia's Oil Minister Ali al-Nuaimi had said in an interview with Indian television that the oil kingpin was ready to boost supplies to 11 million barrels per day from 9.5 million.

Oil prices have gained some 11 percent since the start of the year, mainly as a result of mounting tensions in key OPEC members Iran and Nigeria, which between them produce about 8.0-percent of global crude supply.