Oil prices slipped closer to $106 a barrel Monday as investors weighed concerns over global economic growth against possible disruptions in crude supplies due to an international standoff over Iran's nuclear program.
By early afternoon in Europe, benchmark oil for May delivery was down 28 cents to $106.59 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.52 to $106.87 per barrel in New York on Friday.
In London, Brent crude for May delivery was up 10 cents at $125.23 per barrel on the ICE Futures exchange.
Crude has hovered between $105 and $110 for the last month, up from $75 in October, amid worries that a military strike by Israel or the U.S. on Iran's nuclear facilities could disrupt supplies from the oil-rich Middle East. On Friday, reports said Iran's crude exports fell sharply last month, suggesting sanctions imposed by Western powers have begun to impact the country's economy.
President Barack Obama said Sunday that there is still time to resolve the dispute over Iran nuclear program diplomatically, but that the window is closing.
"A sizable risk premium is likely to remain in place for some time while the Iranian situation goes unresolved," National Australia Bank said in a report. It "suggests that prices through 2012 will continue to sit north of $100."
However, signs of tepid crude demand in the U.S. and Europe and slowing economic growth in China were limiting gains and weighing on equity markets. Analysts are also concerned that higher fuel costs will undermine consumer spending and trigger inflation.
"Elevated oil prices are beginning to take a toll on emerging market economies," Morgan Stanley analysts said in a report.
In other energy trading, heating oil was up 0.28 cent at $3.2275 per gallon and gasoline futures added 0.38 cent at $3.3727 per gallon. Natural gas rose 1.9 cents at $2.294 per 1,000 cubic feet.
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Alex Kennedy in Singapore contributed to this report.
