Oil prices down in Asia on profit taking

New York's main contract, light sweet crude for delivery in March, was down 4 U.S. cents to US$96.64 a barrel in the afternoon and Brent North Sea crude for March delivery shed 17 U.S. cents to US$112.25.

Prices had ended higher in overnight trades on signs of stronger economic growth in Europe and fresh economic stimulus measures announced by Japan's central bank.

Over the longer term, oil is likely to remain supported by encouraging news from Europe, the U.S. and Japan, analysts said.

A survey published on Tuesday showed that German investor sentiment was at its highest level since the start of the eurozone debt crisis in 2010, as the outlook for Europe's top economy continues to brighten.

The Bank of Japan, under pressure from the country's new Prime Minister Shinzo Abe to devalue the yen, adopted a 2-percent inflation target and announced plans to begin open-ended asset purchases next year in a bid to kick-start the struggling economy.

In the United States, fears of a political gridlock over fiscal issues appear to have eased.

Fiscal difficulties are “still there but the risks of falling/jumping off a cliff are much lower than in December,” DBS Research said in a market commentary.

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