Oil prices rose on Tuesday on forecasts that global supplies will struggle to keep pace with demand and concerns that tensions between Israel and Iran could lead to a disruption of exports from the OPEC nation.

The dramatic rise in oil prices is a bubble, famous turnaround investor Wilbur Ross told CNBC Monday, adding that there is no apparent supply problem with crude.

Oil slipped off a record high of more than $143 a barrel as weak U.S. demand countered mounting tensions between OPEC nation Iran and Israel.

Oil futures climbed to a new record near $143 a barrel Friday as the dollar weakened against the euro, confirming expectations that the falling greenback, a major factor in crude's stratospheric rise, will extend its decline and add to oil's appeal.

Oil futures shot above $140 Thursday after OPEC's president said oil prices could rise well above $150 a barrel this year and Libya said it may cut oil production.

Oil fell more than $2 on Wednesday after U.S. weekly data showed crude inventories in the world's top consumer rising as high fuel prices continued to erode demand.

A consortium led by European aerospace group EADS is favorite to win a $1 billion contract to build a border fence shielding Saudi Arabia from Iraq, executives at the Saudi business partner said.

U.S. crude oil futures edged up on, seesawing on reports of shut Nigerian output being restored and the threat of a strike shutting other output.

Oil rose as Nigerian supply disruptions and escalating tensions between Israel and Iran outweighed Saudi Arabia's pledge to raise output and keep markets well-supplied.

The Saudis will increase oil production capacity gradually over the next year, a senior advisor to the Minister of Petroleum told CNBC's Melissa Francis in an exclusive interview.

The record run-up in oil prices over recent years is igniting fierce debate over the "peak oil" theory — that once the maximum rate of global production is reached, a steep decline ensues.   Here we present two squarely opposed viewpoints on the issues from rivals who have been sparring for years. 

Eight-cylinder luxury cars will rumble along Jeddah's highways guzzling cheap Saudi gasoline as energy powers hold emergency talks in the Red Sea port this weekend to brake the free-wheeling rise in oil prices.

Oil rose as a strike threat by oil workers in OPEC nation Nigeria stoked supply concerns ahead of a meeting of top producers and consumers aimed at tackling soaring energy prices.

Oil prices slipped from record highs on plans by top exporter Saudi Arabia to increase crude output to help curb soaring fuel costs.

Oil prices eased Monday as top world producer Saudi Arabia appeared poised to boost production to the highest level in decades to ease a record rally that has threatened global economic growth.