Brent crude prices pulled back on Monday, after five straight higher settlements, as G20 concerns about the effect of higher oil prices on global growth and a stronger dollar helped counter ongoing fears about tensions with Iran and potential supply disruptions.
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The Group of 20 finance ministers and central bankers said on Sunday they were "alert to the risks of higher oil prices" and discussed at length the impact that sanctions on Iran will have on crude supplies and global growth.
The G20 officials also said that they welcomed a commitment from producer countries to ensure oil supplies.
The dollar index edged up and the euro eased against the U.S. currency, even as the Japanese yen recovered from a nine-month low against the dollar. A stronger dollar can weigh on dollar-denominated oil by making it more expensive for consumers using other currencies.
Adding to the less supportive sentiment, U.S. equities on Wall Street opened lower before recovering to near flat, following the S&P 500's four-year closing high last week and after the G20 told Europe it must commit more money to fight the European Union debt crisis before seeking broader assistance.
"The energy complex is pulling back about 1 percent this morning partially on a softening in the equities and euro," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.
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"Weekend G20 meetings also prompted some selling amidst some reluctance to provide more European bailout packages," Ritterbusch added.
Brent April crude fell $1.25 to $124.22 a barrel by 11:31 a.m. EST (1631 GMT), after settling at a near 10-month peak above $125 a barrel on Friday.
Brent remained on pace to post a nearly 12 percent gain for February and is up nearly 16 percent on the year, after a 13.3 percent gain in 2011, raising fears of strains on some of the world's weaker economies, particularly in Europe.
U.S. April crude fell 62 cents to $109.15 a barrel, having swung from $108.24 to $109.77, following seven straight higher closes.
U.S. crude is on pace for a 10 percent gain in February and is up nearly 11 percent for the year after a 2011 gain of 8.2 percent.
Sanctions against Iran over its nuclear program have removed a major supply source for many refiners and investors worry escalating confrontation in the Middle East could disrupt oil flows from other suppliers in the Gulf.
Supplies from several smaller producers, including South Sudan, Yemen and Syria, have also been cut off in recent months, tightening supplies to some markets.
But supplies from Saudi Arabia and Nigeria were rising and there has also been speculation about a release of U.S. strategic reserves to offset lost Iranian barrels and combat high prices.
(Additional reporting by Gene Ramos in New York, Christopher Johnson in London and Manash Goswami; in Singapore; Editing by Marguerita Choy)