However, ongoing concerns over Iran's controversial nuclear programme will keep crude prices above 70 dollars until the issue is resolved, they said.

The market's slight cooling came after global finance chiefs called for action against runaway oil prices and OPEC member Kuwait proposed reactivating standby capacity in an effort to prevent further increases.

At 1:14 pm (0514 GMT), New York's main contract, light sweet crude for June delivery, was at 74.54 dollars a barrel compared with its record close of 75.17 dollars in the United States Friday.

"It's a little pullback from the record last Friday," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"Even though this morning there is a pullback, I expect the market to remain strong. The Iranian issue is not going to be resolved any time soon so it will keep prices strong."

Oil prices are about 80 percent higher than in January 2005 and more than three times the level of four years ago, fuelled also by strong demand from China and India, whose economies are booming.

Iran insisted Sunday it would continue sensitive nuclear fuel cycle work despite the UN Security Council's deadline this Friday for it to freeze uranium enrichment.

The market is concerned crude supplies from Iran would be severely disrupted in the event of any military action by Washington.

Iran is the world's fourth largest crude producer and the second-biggest in the Organization of Petroleum Exporting Countries (OPEC).

Aside from Iran, the market is concerned with tight gasoline supplies in the United States and the situation in Nigeria where 20 percent of its crude output remains offline following recent rebel attacks on the country's energy installations in the Niger Delta.