Oil prices fell to near $106 a barrel on Monday as a slowdown in China's trade suggested global demand for crude may be slowing.
By early afternoon in Europe, benchmark oil for April delivery was down $1.12 to $106.28 in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents to settle at $107.40 per barrel in New York on Friday.
In London, Brent crude was down $1.20 at $124.78 per barrel on the ICE Futures exchange.
China on Saturday reported its biggest monthly trade deficit in at least a decade in February as imports rebounded after a Lunar New Year holiday slowdown in January. But the combined figures for both months showed growth in imports and exports decelerating markedly.
January-February export growth slowed to 6.9 percent over the same two-month period last year, barely half of December's 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December's 11.8 percent.
Despite the slowing of China's overall trade figures, it remained a major importer of oil and other fuels.
Analysts at JBC Energy in Vienna said China imported a record-high 5.95 million barrels a day of crude oil in February, an 8 percent rise on January and 14.4 percent higher than in February 2011.
"An implied stockbuild of 840,000 barrels a day over the past two months at a time of near record outright prices indicates that China is shying away from its usual price-sensitive buying habits as supply security fears begin to gain the upper hand," JBC Energy said in a market report.
Crude has jumped from $75 in October as signs of an improving U.S. economy have bolstered investor confidence. The government reported Friday that the U.S. economy added a better than expected 227,000 jobs last month and the unemployment rate remained steady at 8.3 percent.
"There are strong indications that global GDP growth is stronger than commonly imagined," J.P. Morgan said in a report. "If this trend were to continue throughout 2012, oil demand growth and corresponding price pressures could be higher than currently projected."
J.P. Morgan expects crude to average $111 this year and $122 in 2013.
Some analysts worry that higher oil prices will eventually undermine economic growth and demand for Asian goods in the U.S. and Europe. Higher fuel costs also threaten to re-ignite inflation in Asia.
"Across the region, food prices tend to rise with a lag in response to oil, and food matters hugely for regional inflation," said Frederic Neumann, economist with HSBC in Hong Kong. "We need crude to come down."
Crude has traded near 10-month highs in recent weeks amid growing tensions over Iran nuclear program. Analysts forecast that a pre-emptive military strike by the U.S. or Israel on Iran's nuclear facilities would likely lead to global crude supply disruptions and a jump in oil prices.
"Evidently investors are beginning to feel that the oil price has reached its upper limit and are taking profits while they can," said a report from Commerzbank in Frankfurt. "That said, it is unlikely that financial investors will exit on a large scale given the supply risks due to the Iran crisis."
In other energy trading, heating oil fell 2.22 cents to $3.2416 per gallon and gasoline futures fell 1.98 cents to $3.3126 per gallon. Natural gas slid 6.6 cents to $2.258 per 1,000 cubic feet.