SYDNEY: Oil prices fell by $1.50 to near the $100 a barrel mark on Monday, extending last week's deep losses as funds sought to lock in first quarter profits.
US light crude for May delivery fell $1.51 to $100.33 a barrel in Globex electronic trading.
Prices dropped by nearly $9, about 8 percent, last week as investors fled the commodities complex on fears that gains had been overdone, giving a boost to the beleaguered dollar in the process.
London Brent crude fell $1.12 cents to $99.26. Markets could also be reacting to comments from Saudi Arabia that it was working to expand its oil production and refinery capacity.
Saudi Arabia said this is being done inorder to maintain world economic growth, reaffirming its vow to invest tens of billions of dollars in new wells and infrastructure.
This announcement follows the visit of U S Vice President Dick Cheney to Saudi Arabia. A tumbling US dollar and geopolitics in the Middle East have helped fuel the recent rally in oil prices.
The rally saw oil and other commodities strike a series of record highs since the beginning of the year as investors fled stock markets and took refuge in dollar denominated assets.
But oil has fallen sharply from its lifetime high of $111.80 on March 17, as nervous investors, worried about the outlook of the global economy, cash in on recent record prices.
OPEC President Chakib Khelil said on Saturday petroleum prices will range between $80 and $110 per barrel for the rest of 2008. The reopening of Mexico's oil ports on Friday also weighed on oil prices.