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Oil prices drop on emerging-market worries

Oil prices fell on Friday on profit taking and sustained worries over economic troubles spreading through emerging-market countries.

NEW YORK: Oil prices fell on Friday on profit taking and sustained worries over economic troubles spreading through emerging-market countries.

New York's main contract, West Texas Intermediate for delivery in March fell 74 cents to close at $97.49 a barrel.

Brent North Sea crude for March settled at $106.60 a barrel, down $1.55 in London trade from Thursday's closing level.

Trade was light with most Asian markets closed for the Lunar New Year holiday.

Andy Lipow of Lipow Oil Associates said the weakness in the markets was tied to the wave of concern over economic fragility in emerging market countries.

Earlier Friday, the International Monetary Fund warned emerging economies to shore up their defences amid challenging global turmoil that has sparked a broad-based sell-off in financial markets.

"While it is difficult to pinpoint a single trigger for the sell-off, the turbulence underscores the challenging situation that many countries face as a result of tighter external financing conditions, slower growth, and softer commodity prices," an IMF spokesperson said.

Oil prices had jumped on Thursday after the US Commerce Department said the world's number one economy -- and biggest crude consumer -- expanded 3.2 per cent in the October-December quarter.

That was much better than the 3.0 per cent fourth-quarter reading predicted by analysts.

Akio Shibata, president of Japan's National Resource Research Institute, said oil prices "will likely remain at relatively high levels for some time to come as demand will grow on the backdrop of a strong US economy."

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