NEW YORK, February 27, 2012 (AFP) - Oil prices sank on Monday as traders booked profits following rallies last week after the Group of 20 major economies spurned Europe's appeal to help fight the eurozone debt crisis.
Disappointment over the weekend G20 meeting also pushed the dollar higher, making greenback-priced crude more expensive for buyers using other currencies.
Meanwhile, the markets kept an eye on tensions over Iran's nuclear program and its potential to disrupt already tight global oil supplies.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for April, closed at $108.56 a barrel, down $1.21 from Friday's closing level.
Brent North Sea oil for delivery in April dived $1.30 to settle at $124.17 a barrel in London.
"Crude oil prices retreated... in a healthy correction lower, as the US dollar rebounded and weighed on market sentiment, following last week's strong rally," said analyst Myrto Sokou at the Sucden Financial Research brokerage.
A weekend G20 meeting of finance chiefs in Mexico ended with the European Union being told it needed to build up a bigger financial firewall before others would help by boosting the International Monetary Fund's resources.
"The US dollar strengthened following this weekend's G20 meeting," added GFT analyst David Morrison.
"World policymakers insisted that European countries must contribute more to the eurozone bailout, before asking for further help from the IMF."
Analysts warned that worries remain over crude producer Iran's nuclear program.
"The main driver at the moment is the ongoing tensions in Iran, with fears of supply disruptions sending crude prices soaring to a nine month high on Friday," said Simon Denham, boss of trading group Capital Spreads.
"Overnight trade in Brent though could not hold those levels and traders who thought maybe the rise was a tad overdone decided to rid some of their positions."
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