Oil slides to one-week low

NEW YORK (CNNMoney) — Oil prices have been edging off recent highs as worries about supply disruptions ease.

The main U.S. oil futures contract, West Texas Intermediate, fell 84 cents to $103.15 a barrel. Earlier, prices slid to a one-week low of $102.70 a barrel.

Meanwhile, brent crude, the European benchmark, declined 30 cents to $114.50 a barrel.

Opposition fighters in Libya went on the offensive, Monday, regaining control of cities and key oil installations in Africa’s third largest crude producer.

Aside from supply jitters, investors are keeping an eye on domestic issues as well, with the latest reading on consumer confidence due out at 10 a.m. ET.

“This is make it or break it time for WTI,” said Stephen Schork, energy industry analyst. “If we see a disappointing consumer confidence number and a higher dollar there is a very real chance that we can trace the $100 barrier before the end of this week.”

There’s been an ongoing concern that rising oil prices will begin to dent consumer demand for gasoline.

Retail gas prices edged higher Tuesday for the seventh day in a row. The national average price for a gallon of regular gasoline increased overnight by three tenths of a cent to $3.587, according to a daily survey from motorist group AAA.

To be sure, gas prices typically rise in the months leading up to the summer driving season. But the volatile political situation in North Africa and the Middle East has driven oil prices up some 10% so far this year, pushing gas prices above $4 a gallon in some U.S. states.

And analysts warn that oil prices could rebound if the turmoil accelerates in strategically important nations like Yemen, Syria and Bahrain.

“Investors should remain cautious, as there is so much uncertainty in the markets at the moment,” Myrto Sokou, an energy analyst at Sucden Financial, wrote in a research report.

In addition to political risks in the Middle East, investors are also worried about energy demand in Japan, the world’s third-largest economy, following the March 11 earthquake and tsunami.

While oil consumption could strengthen in Japan as it rebuilds, analysts say the short-term outlook is far from certain.