SINGAPORE: Oil prices fell in Asia Monday as dealers took profits from steep gains in volatile month end trading last week, while a US refinery strike also weighed, analysts said.
US benchmark West Texas Intermediate for March delivery fell $1.35 to $46.89 while Brent crude for March was down $1.41 at $51.58 in afternoon trade.
Analysts said dealers were taking profits after WTI rebounded from six-year lows to rocket $3.71 Friday, while Brent surged $3.46.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said the price changes were “speculative in nature”.
“We continue to believe that prices are consolidating as the market attempts to correct supply and demand.
“We do not believe that prices will exit this range without fundamental change, therefore, we expect the sharp rise on Friday to be an outlier.”
Analysts said prices were also facing downward pressure on concerns strikes at US refineries could curtail crude processing in the world’s top oil consumer.
The United Steelworkers union, which represents employees at more than 200 US refineries, terminals, pipelines and chemical plants, stopped work on Sunday at nine sites after failing to agree on a labour contract, Bloomberg News reported.
The refineries on strike can produce 1.82 million barrels a day of fuel, about 10 percent of total US capacity, according to data compiled by Bloomberg.
A refinery shutdown in the US would add to the huge global supply glut as raw crude is not processed for consumption.
The oil market has lost more than half its value since June last year when the commodity was sitting at more than $100 a barrel, largely due to a surge in global reserves boosted by robust US shale oil production.
The problem was exacerbated in November after the OPEC oil cartel insisted that it would maintain output levels despite plunging prices. The 12 nation group pumps about 30 percent of global crude.