Oil drops more than 10 a barrel

The turnaround may not signal a lasting shift in sentiment 8212; prices have swung violently in recent days as they flirted with record highs. But it does underscore investor uncertainty about the sustainability of sky-high prices and their effect on the broader economy. 8220;They8217;re slamming this pretty good. But remember, these 10 moves are becoming a little more commonplace,8221; said Phil Flynn, analyst at Alaron Trading Corp. in Chicago.

Earlier, the contract rose as high as 146.73 and fell as low as 135.92. The ingredients for further gains were in place early on. The dollar fell to a new low against the euro, prompting investors to pour money into oil as a hedge against inflation and made crude cheaper for overseas buyers.

Mounting worries about the health of the US economy helped spur the sell-off.

Federal Reserve Chairman Ben Bernanke told Congress that 8220;numerous difficulties8221; are racking the economy of the world8217;s largest oil consumer, and warned that rising prices for energy and food are heightening the risk of inflation accelerating.

At the same time, the Labor Department reported that wholesale inflation jumped by 1.8 per cent last month, a larger-than-expected gain.