NEW YORK -- Oil prices fell below $130 a barrel for the first time in more than a month yesterday as a dramatic slide entered a third day along with a sharp sell-off in natural gas.

Light, sweet crude for August delivery dropped $5.31 to settle at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen more than $15 in the past three days.

Natural gas futures for August delivery fell more than 8 percent yesterday, marking their biggest one-day drop in nearly a year, said Nathan Golz, researcher at Wachovia Securities in St. Louis.

Prices for the key heating, cooking and power generation fuel have tumbled more than 20 percent since their peak before the Fourth of July and are now trading at their lowest point since April.

A number of market observers say there was nothing supporting the run up in natural gas prices, which peaked in early July, and that this week's sell-off of oil has only helped speed the declines.

"Any time oil goes up or down on Nymex, it's going to have a carry-over effect on natural gas," said Michael Rieke, senior managing editor for power and gas at energy research firm Platts.

The immediate cause of Thursday's sharp natural gas decline was a larger-than-expected build of U.S. supplies.

Reports of a pre-dawn explosion that damaged a petroleum pipeline in Nigeria's restive southern region -- the sort of threat to supply that has helped fuel crude's recent rally -- did little to prop up prices yesterday.

A Nigerian military official said the blast on a pipeline owned by Agip, a subsidiary of the Italian energy giant Eni S.p.A, "affected output," although he did not say by how much.

At the gas pump, prices held steady at a record $4.114 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel rose to a new record of $4.845, up more than half a penny.