Oil eases below USD 105 in Asian trade on US concerns

In afternoon trade, New York's main contract, light sweet crude for April delivery, fell 24 cents to USD 104.91 from Friday's close of USD 105.15 in New York.

The contract hit a new intra-day peak of USD 106.54 on Friday.

But last Friday's bleak US jobs report showed employers there cut 63,000 positions in February, marking the biggest monthly loss in nonfarm payrolls in five years and sparking new fears of a US recession.

"The strength of oil prices are not related to market fundamentals now, so the oil market is prone to corrections when more poor economic data comes out," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"If more of such bad economic data comes out, it will weigh down on the oil market as it triggers investors to exit oil as fast as they came in," he said.

London's Brent North Sea crude for April delivery dropped 25 cents to USD 102.13 per barrel. The contract scaled a new trading peak of USD 103.98 on Friday.

"The market is trading sideways now that prices are not driven by fundamentals," said Tony Nunan, Mitsubishi Corp's risk management manager at its international petroleum business in Tokyo.

There is also adequate supply of crude in the market, he said.

The Organisation of the Petroleum Exporting Countries (OPEC), which produces 40 per cent of the world's crude, decided at a policy meeting last week to maintain its daily production target of 29.67 million barrels.

Source: DDNEWS