SINGAPORE: Oil prices eased on Monday on eurozone fears after Cyprus said it planned to tax bank deposits to win bailout cash while a US survey showed a dip in consumer confidence, analysts said.
New York's main contract, light sweet crude for delivery in April, dropped $1.02 to $92.43 a barrel in the afternoon and Brent North Sea crude for May delivery shed $1.20 to $108.62.
Eurozone finance ministers and the International Monetary Fund on Saturday agreed on a 10 billion-euro ($13 billion) bailout deal for Cyprus, the fifth eurozone member to be saved from bankruptcy.
Under the deal, deposits of more than 100,000 euros ($129,000) will be hit with a 9.9 percent charge and 6.75 percent for anything below that threshold.
The proposal must still be passed by parliament.
"Oil prices have dropped in line with expectations regarding Cypriot developments," said Jason Hughes, head of premium client management at IG Markets Singapore.
He said that while details remained unclear, the move may force foreign investors trading with eurozone-based companies to "question their arrangements" in the region.
President Nicos Anastasiades on Sunday called the controversial proposal the "least painful" option for the island, as rejecting the EU demands would see Cyprus exit the eurozone and sinking into bankruptcy.
"The issue is not as simple as whether the Cypriot government supports the bailout. The market is worried that it may send the wrong message on the safety of bank deposits in other EU nations," DBS Group Research said in a report.
Sentiment was also hit after a key index on Friday showed a dip in US consumer confidence, possibly pointing to a slowdown in household spending.
The University of Michigan confidence index for early March fell to 71.8 from 77.6 in February, against forecasts that predicted a rise.
Analysts said the drop may have been caused by higher paycheck tax deductions and the prospect of slashed government spending in the "sequester" cuts, which took effect on March 1.
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