Oil prices fall as US sequester cuts loom

Oil prices fell late in the session Thursday after trading slightly higher much of the day, with traders blaming portfolio adjustment on the final day of the month.

But prices were also soft as the United States appeared headed for slower economic growth due to mandated spending cuts that kick in beginning Friday.

New York's main contract, West Texas Intermediate crude for April delivery, lost 71 cents from late Wednesday, closing at $92.05 a barrel.

Brent North Sea crude for April fell 49 cents to $111.38 a barrel in London trade.

Prices were fairly stable much of the day, showing little impact from an improved but still disappointing revision to the US growth rate for the 2012 fourth quarter, to a positive 0.1 percent from the original estimate of a 0.1 percent contraction.

But late in the session support for WTI and Brent dropped out.

"That has a lot to do with the technical selling pressure that finally gave up towards the end of the day. Today is the last day of the month and you'll see some month-end rebalancing," said David Bouckhout of TD Securities.

The market also appeared well-supplied given the pace of the global economy, analysts said.

"Fundamentally, oil prices are unlikely to rise much in the short term as demand remains weak and supply abundant," said Fawad Razaqzada of traders GFT Markets.

The US appeared headed for a growth slowdown as the US government's "sequester" budget cuts appeared likely to take effect Friday.

Economists warn the $85 billion in spending reductions for the next seven months will take off a 0.5 percentage point from potential growth, if politicians cannot find a last-minute compromise in White House talks Friday.