SINGAPORE – Oil was lower in Asian trade on Tuesday on profit-taking amid concerns that rising prices could hamper global economic growth, analysts said.
New York's main contract, light sweet crude for delivery in April, shed 61 cents to US$107.95, while Brent North Sea crude for April delivery was down 42 cents to $123.75 in morning trade.
"Crude prices pulled back... as concerns that high oil prices might curb economic growth, along with the stronger dollar, countered supportive fears about Iran and potential supply disruptions," said Phillip Futures in a commentary.
Traders are closely watching the situation in Europe, after data released by the European Central Bank (ECB) on Monday showed that bank lending to the private sector in the debt-strapped region remains fragile.
The ECB is preparing to flood eurozone banks with cheap money again this week in the second of two such operations to prevent a credit crunch in the region.
Meanwhile, tensions between Iran and the West over Tehran's controversial nuclear programme are expected to provide underlying support to oil prices, analysts said.
"The main driver at the moment is the ongoing tensions in Iran, with fears of supply disruptions sending crude prices soaring to a nine-month high on Friday," said Simon Denham, boss of trading group Capital Spreads.
"Overnight trade in Brent though could not hold those levels and traders who thought maybe the rise was a tad overdone decided to rid some of their positions." AFP