Oil below $107 after Saudi explosion report denied

Oil prices fell below $107 a barrel Friday after Saudi Arabia denied an Iranian media report of a Saudi pipeline explosion. A stronger dollar and some profit-taking after the previous days rally were contributing factors.Benchmark West Texas Intermediate crude for April delivery, which is used to price much of the oil produced in the U.S.Midwest, fell by $2.80, or 2.6 percent, to $106.04 per barrel in afternoon trading on the New York Mercantile Exchange.Brent crude, imported by many U.S. refineries that make gasoline, fell by $2.65 to $123.55 a barrel in London.Crude jumped to $110.55 late Thursday after an unconfirmed Iranian media report of a pipeline explosion in Saudi Arabia. Saudi officials denied the report.Oil prices have risen from $96 last month amid fears that conflict over Irans nuclear program could trigger a disruption in global crude supplies. Signs of an improving U.S. economy have also bolstered investor optimism and crude prices.Iran, the worlds third-largest oil exporter, faces a European embargo and other international sanctions as the West tries to force its nuclear facilities to open to inspectors. Some experts say Iran is trying to build a nuclear weapon, though the country denies it.The recent jump in oil began to stall late this week. With prices near last years highs, traders say theyre increasingly worried about the consumers ability to pay higher prices.These prices are beginning to bite, independent oil trader Jim Ritterbusch said. Were at the point where people are getting concerned of further economic recovery, not just in the U.S. but much of the globe.On Friday, renewed concerns over Europes economy lingered and U.S. stock indexes were slightly down in afternoon trading. The dollar rose sharply against the euro after Spain warned that its budget deficit would be worse than previously expected.In other energy trading, heating oil 7 cents to $3.20 per gallon and gasoline futures fell 8 cents to $3.27 per gallon. Natural gas futures rose 2 cents to $2.48 per 1,000 cubic feet.