Oil prices fall sharply

Global oil prices recoiled on Friday on profit-taking and as the dollar surged to a four-year high point against the yen, dealers said. Markets are awaiting the US federal budget figures for April, a speech from Federal Reserve chief Ben Bernanke, and a two-day Group of Seven finance meeting in Britain. Brent North Sea crude for delivery in June sank $1.42 cents to $103.05 per barrel in London afternoon deals. New York's main contract, West Texas Intermediate (WTI) or light sweet crude for June, shed $1.55 cents to $94.84 a barrel. "Brent crude oil retreated sharply on Friday, extending losses toward $103 per barrel, due to some profit taking, as investors try to remain cautious ahead of the release of the US federal budget details later today and the G7 meeting," said analyst Myrto Sokou at the Sucden brokerage. "WTI crude oil also fell sharply toward $95 per barrel area, while the stronger US dollar weighs further on risk appetite." G7 finance ministers and central bank chiefs begin talks on Friday on spurring growth, with currency factors likely to feature after the dollar spiked to a four-year yen high. The surging greenback makes dollar-priced crude more expensive for buyers using cheaper currencies like the yen. That in turn tends to hit oil demand and price levels. On Thursday, the dollar vaulted past the key 100-yen barrier for the first time in more than four years, as Tokyo's aggressive stimulus efforts to lift the Japanese economy continue to depress its currency, helping to boost demand for Japanese exports. And the dollar raced as high as 101.74 yen on Friday, touching a level last seen on October 17, 2008, with sentiment boosted also by upbeat US labour market data. Meanwhile on Friday, OPEC said it still expected global oil demand to inch higher in 2013 despite a weaker-than-expected first quarter and concerns about growth in China and the eurozone. The Organization of Petroleum Exporting Countries, which accounts for around 35 percent of global crude output, forecast total average oil demand of 89.7 million barrels per day, up 0.8 mbpd from 2012, unchanged from its pervious projection. "A fragile recovery in the global economy has been visible since the beginning of the year, but momentum has started slowing again and growth risks are skewed to the downside," the cartel said. This week, the oil market was dented this week by evidence of swelling supplies in the United States. "The main downside factor on prices right now is the huge oversupply in the United States," Kelly Teoh, market strategist at IG Markets in Singapore, told AFP. The US government's Energy Information Administration (EIA) earlier this week said that American crude stocks rose to 395.5 million barrels in the week ending May 3, the highest level since 1982. The buildup in US supplies indicates production is outstripping demand, putting downward pressure on prices. US inventories are a vital focus for traders because the United States is the world's biggest economy and its largest oil-consuming nation.