UPDATE 1-Oil eases from record high above $140

                                
 * Oil eases from record high on profit taking
                                
 * U.S. lawmaker urge CFTC to investigate market behaviour
                                
 * OPEC chief says oil could hit $170 in coming months
(Updates prices)
                                
 By Fayen Wong
                                
 PERTH, June 27 (Reuters) - Oil eased on Friday on profit
taking after a near 4 percent surge the previous session to a
record above $140, as U.S. lawmakers approved legislation aimed
at curbing energy market speculation.
                                
 U.S. light crude for August delivery <CLc1> was down 43
cents at $139.21 a barrel in Globex electronic trading by 0503
GMT, after falling as much as $1.03 at the start of electronic
trading.
                                
 London Brent crude <LCOc1> fell 62 cents to $139.21.
                                
 "I think oil is down on a little bit of profit taking and
also news from the U.S. regarding increased regulation of
markets," said Toby Hassall, an analyst from Commodities
Warrants Australia.
                                
 The legislation, which still needs Senate approval, directs
the Commodity Futures Trading Commission (CFTC), the futures
market regulator, to use all its authority including emergency
powers to "curb immediately" the role of excessive speculation
in energy futures markets. [ID:nN26384542]
                                
 Oil prices have doubled from $70 a year ago on supply
disruptions and geopolitical tensions in the Middle East.
Rising flows of cash into commodities from investors seeking to
hedge against inflation and the weak dollar have also added to
gains.
                                
 Analysts said it would probably be weeks or months before
the legislation could come into effect and dealers would
instead focus on supply risks and dollar movements in the short
term.
                                
 "It may be months away before the legislation comes into
effect but just the fact that it was passed is definitely
enough to give the market a little bit of a bearish sentiment,"
said Hassall.
                                
 U.S. oil hit a record of $140.39 on Thursday after Libya
said it was studying possible options to cut output in response
to potential U.S. actions against OPEC countries.
                                
 "We are studying all the options," Libya's most senior oil
official, Shokri Ghanem, told Reuters by telephone, adding oil
producers needed protection from what he viewed as U.S.
attempts to extend its jurisdiction beyond its territory.
[ID:nL26304859]
                                
 Oil's rise was also bolstered by a weak dollar, which
hovered near three-week lows against the euro on Friday due to
weak U.S. economic fundamentals and renewed credit concerns.
[USD/]
                                
 OPEC President Chakib Khelil said in an interview on
Thursday that prices could reach $170 a barrel in the coming
months, and he reiterated the cartel's position that
speculation -- not a supply problem -- was driving oil to new
highs.
                                
 "I forecast prices probably between $150 and $170 during
this summer. That will perhaps ease towards the end of the
year," Khelil told France 24 television, according to a text of
the interview released by the station.
                                
 Talks between oil workers and Chevron continued in Nigeria,
with the oil minister saying he was confident a deal could be
reached, but union officials left open the possibility of a
strike early next week. [ID:nL26819865]
 (Reporting by Fayen Wong; Editing by Clarence Fernandez)