The New Nation - Internet Edition

AFP, Singapore

World oil traded lower in Asia on Monday after concerns for the US economy appeared to outweigh the impact of OPEC's decision to hold output steady, dealers said.

In afternoon trade, New York's main contract, light sweet crude for delivery in March, was 13 cents lower at 88.83 dollars a barrel.

On Friday the contract plunged 2.79 dollars to close at 88.96 dollars per barrel, after briefly rising following OPEC's widely- expected decision to leave its output quotas unchanged.

It was the first time this year that the New York benchmark contract closed below the psychological 89-dollar level.

Brent North Sea crude for March delivery was down a penny at 89.43 dollars a barrel after settling 2.77 dollars lower at 89.44 dollars a barrel in London on Friday.

At its meeting in Vienna on Friday, the Organisation of the Petroleum Exporting Countries (OPEC), which pumps 40 percent of world oil, held its official daily output at 29.67 million oil barrels.

Shortly after OPEC's announcement, fresh US data led to renewed fears for economic growth in the world's biggest energy consumer.

A US government report showed the economy lost 17,000 non- farm jobs in January. It was the first jobs loss in more than four years and indicated the strains from a housing crisis and a related credit crunch were spreading through the world's biggest economy, analysts said.

The market may also be already looking ahead to an easing of demand at the end of the Northern hemisphere winter next month, Moore added.

US President George W. Bush, expressing worries over the global economic impact of high oil prices, had said he hoped OPEC would increase output.

Explaining its decision, the 13-nation cartel said stockpiles of crude were likely to increase in the first half of this year. The group also noted "the projected economic slowdown".

The International Energy Agency, which represents the interests of oil- consuming countries, Friday tacitly accused OPEC of increasing pressure on a vulnerable world economy by its refusal to pump more oil to help bring down crude prices.

Since striking a high above 100 dollars at the start of the year, New York oil prices have slid owing to fears of a US recession and a global economic slowdown.