Oil prices drop on lofty supplies

(MENAFN- AFP) Oil prices fell Monday on renewed concerns about excess global supplies, with the European benchmark contract falling especially hard following a surge late last week.

US benchmark West Texas Intermediate (WTI) for April delivery dipped 17 cents to $49.59 a barrel on the New York Mercantile Exchange.

European benchmark Brent North Sea crude for April delivery dived $3.04 to $59.54 a barrel in London.

Tim Evans, energy analyst at Citi Futures, cited a "partial recovery " in Libyan oil production as a drag on energy prices.

Evans said the US market saw some uptick in demand from the return to service of refineries that had been under maintenance.

"On a net basis, however, with most of the petroleum sectors showing losses, the overall tone is defensive," Evans said.

The drop in Brent came after the European contract gained a hefty $2.53 a barrel on Friday. Some analysts saw the retreat Monday as evidence of profit taking.

"Crude oil inventories continue to remain at fairly high levels following ongoing builds of crude stocks last week," said Sucden analyst Myrto Sokou.

Analysts also noted that WTI was primed to recover some lost ground in comparison to Brent after the gap between Brent and WTI last week had widened to more than $12, more than double the level earlier in February.