OIL prices fell yesterday after a two-day rise as traders eyed mixed signs about the strength of the global economy.

Benchmark oil for May delivery gave up US$1.22 to settle at US$104.01 a barrel on the New York Mercantile Exchange. The contract rose US$2.21 to settle at US$105.23 per barrel on Monday.

Losses accelerated after minutes from a Federal Resrve meeting last month showed the Fed sketched a slightly sunnier view of the US economy, largely because of the best three months of hiring in two years. But members noted that there have been similar bursts of hiring in the past two years that ended up fading.

In London, Brent crude fell 57 US cents to finish at US$124.56 per barrel on the ICE Futures exchange.

Crude has traded near US$105 a barrel since February as traders weigh an improving US economy against signs of weakening growth in Europe and China.

Prices were bolstered Monday by a report that showed US industrial production grew in March at a faster pace than February while China said on the weekend that manufacturers also gained momentum in March. However, manufacturing data from France and Germany weakened, suggesting Europe will likely face a recession this year.

Speaking in Washington yesterday, IMF chief Christine Lagarde said the global economy is making some advances in digging itself out of the worst downturn in decades, but that the recovery remains particularly frail in Europe. She suggested cutting government spending too quickly in developed countries like the United States and larger European nations could make things worse, not better.

In other energy trading in New York, heating oil fell by 2.21 US cents to finish at US$3.2275 per gallon and gasoline futures rose 1.32 US cents to end at US$3.3954 per gallon. Natural gas increased by 3.5 US cents to finish at US$2.1870 per 1,000 cubic feet.

Source:shanghaidaily