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Oil prices diverge slightly

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(Globalpost/GlobalPost)

Oil prices traded narrowly mixed on Monday in quiet trading as dealers mulled the outcome of a G20 weekend meeting amid a public holiday in the United States.

Brent North Sea crude for delivery in April edged up three cents to stand at $117.69 a barrel in late London deals.

New York's main contract, light sweet crude for March, fell 29 cents to $95.57 a barrel.

"Crude oil prices started the week on a consolidation mode," said Myrto Sokou, analyst at Sucden brokerage.

"With New York markets closed today, we expect thin trading conditions with low volumes across the oil market. In addition, due to the absence of major macroeconomic data today, currency movements could provide some direction to the oil market."

G20 finance ministers tried on Saturday to calm concerns of looming "economic warfare" on the currency markets, pledging they would not target specific forex rates or devalue currencies to make them more competitive.

The jitters -- similar to previous disputes with China -- have been set off by Japan's plan of monetary easing to boost inflation and activity by reducing the value of the yen under new Prime Minister Shinzo Abe.

"We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes," said the communique after the G20 finance meeting in Moscow under Russia's presidency.

It echoed a similar recent statement by the G7 richest nations which like the G20 statement was also approved by Japan, whose monetary policy has been vehemently criticised by the West in recent weeks.

Elsewhere on Monday, the International Energy Agency's chief economist, Fatih Birol, said that high Brent crude oil prices were posing big risks for the global economy and Europe in particular.

Brent prices hit nine-month highs above $119 a barrel earlier this month on healthy economic data in the United States and China -- the world's two biggest energy consuming nations.

"The current prices now, they are a major problem for global economic recovery, especially for Europe, the weakest chain of the global economy for the time being," Birol told Dow Jones Newswires.

Birol said European oil and gas import bills for 2013 would reach about 500 billion euros ($668 billion) should oil prices remain at current levels.

This means a "major problem for the European and global economy," he added.

The IEA, representing oil consumers, last week trimmed its world oil demand forecast for 2013 on Wednesday.

It said the marginal cut of 85,000 barrels a day was in line with the prospect for a slowdown forecast by the International Monetary Fund, which last month cut its world growth estimate for 2013 to 3.5 percent from 3.6 percent.

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http://www.globalpost.com/dispatch/news/afp/130218/oil-prices-diverge-slightly