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Oil prices fall on sell-off after 7-day surge, still above $108

Analysts say a standoff between the West and Iran over its nuclear program continues to keep oil prices around nine-month highs. But some traders sold contracts to lock in profits following a 9 percent rise since mid-February.

By CHRIS KAHN
The Associated Press

2/27/2012

NEW YORK — Oil prices fell Monday as investors booked some profits after a seven-day surge. Prices were also pressured by concerns about global economic recovery and a stronger dollar.

Benchmark crude fell by $1.21 to end the day at $108.56 per barrel in New York. Brent crude, which is used to price oil that's imported by U.S. refineries, lost $1.30 to finish at $124.17 per barrel in London.

Analysts say a standoff between the West and Iran over its nuclear program continues to keep oil prices around nine-month highs. But some traders sold contracts to lock in profits following a 9 percent rise since mid-February.

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"Some people are getting out now just because oil is at those high levels," PFGBest analyst Phil Flynn said.

Western nations fear that Iran is building a nuclear weapon and have been trying to get international inspectors into its facilities. Iran denies the claim and has threatened to disrupt oil supplies in response to any threats.

The dollar rose against the euro after finance ministers from the world's 20 leading economies said that they would not add money to the International Monetary Fund until the European Union puts up more money to stave off its debt crisis.

The euro fell to $1.3398 in afternoon trading Monday from $1.3459 late Friday. The euro rose to an 11-week high of $1.3486 on Friday.

Meanwhile, gasoline prices continue to rise in the U.S. The national average of $3.70 a gallon (98 cents a liter) is the highest ever for this time of year. Drivers are paying an average of $4.29 per gallon in California.

In some isolated cases around the U.S., gas is already going for more than $5 a gallon ($1.32 a liter).

The Oil Price Information Service said that pump prices should increase by another 5 to 10 cents in coming days to reflect price hikes last week in wholesale markets. The national average could hit $4.25 a gallon ($1.12 a liter) by late April, OPIS chief oil analyst Tom Kloza said.

In other energy trading, heating oil fell by 3 cents to finish at $3.29 per gallon and gasoline futures lost 2 cents to end at $3.13 per gallon. Natural gas futures fell by 10 cents to finish at $2.45 per 1,000 cubic feet.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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