SINGAPORE: Oil was down in Asian trade Monday, but prices remain on an upward trend due to political volatility in the Middle East and North Africa, analysts said.
Any pullback would be "modest", with investors still jittery over supply disruptions if the unrest sweeping the world's oil-producing region escalates, they added.
New York's main contract light sweet crude for May delivery was down 11 cents to $112.68 in volatile afternoon session after soaring to its highest level in more than two years in US trade on Friday.
Brent North Sea crude for delivery in May was down 60 cents to $126.05.
"Oil really rallied late last week... and now we're seeing some pullback," said Victor Shum, a Singapore-based analyst with international energy consultancy Purvin and Gertz.
"Frankly, oil is overbought at these price levels," he told AFP.
Shum said however that the overall mood in the market is for prices to go higher, mainly driven by fears that unrest in the oil-producing Middle East and North Africa region could disrupt supplies.
In strife-torn Libya, deputy foreign minister Khaled Kaim last week accused British warplanes of bombing the country's biggest oil field at Al-Sarir in the southeast.
The bombing, he said, had damaged the pipeline linking Al-Sarir and Tobruk, which is under rebel control.
NATO, which is acting under UN mandate to protect civilians against forces loyal to Libyan leader Moamer Qadhafi, denied the allegation, saying that the fires at the Al-Sarir field were more likely to be linked to skirmishes in the region.
In the latest development, South African President Jacob Zuma said from Tripoli on Sunday that Qadhafi has accepted an African Union peace plan designed to the end the current conflict.
A high-ranking African Union delegation had arrived in Libya earlier to try to broker a truce between Qadhafi and rebels seeking to oust him.
"The unrest in Libya and the greater Middle East and North Africa region continues to be the main driver for oil prices," Shum said.
"There is, however, no imminent threat of supply disruptions beyond what has happened in Libya, so oil futures look to me to be overbought at this time and profit-taking is causing the pullback."
Popular uprisings have recently toppled the leaders of Tunisia and Egypt, and the unrest has spread to countries like Yemen and Syria.
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