Oil prices fall after recent rally

Oil prices fell on Monday as investors banked profits following gains last week driven by encouraging economic data from the United States and China, and unrest in Algeria, traders said.

Brent North Sea crude for March delivery dropped 33 cents to $111.56.

An oil rig is shown in this file photo. Credit: FREE IMAGES

New York's main contract, light sweet crude for delivery in February, shed 40 cents to $95.16 a barrel in electronic deals, with US physical markets closed for a public holiday in the world's biggest economy and oil consumer.

“The current week promises to be fairly volatile, with a lot of attention on temperatures in Europe amid the ongoing cold snap, while players in the US will be absent on Monday owing to a public holiday,” said Andrey Kryuchenkov, analyst at VTB Capital financial group.

Crude futures had risen last week, supported by unrest in energy exporter Algeria, better-than-expected Chinese economic data and signs of improving crude demand in the United States.

China said on Friday that although economic growth slowed for the second year running in 2012, output climbed by 7.9 percent in the fourth quarter compared with output in the year-earlier period.

The report came on the heels of unexpectedly strong US data on jobless claims and housing starts.

Prices were also given support last week by the seizure by radical Islamists of a gas plant in the Algerian desert.

Algeria is a member of the Organization of Petroleum Exporting Countries (OPEC) and there were fears of oil supply disruptions.

However, the crisis came to a bloody end at the weekend in a showdown between the extremists and Algerian troops. - Sapa-AFP