Oil prices dip after rallying on US data

Hong Kong - Oil prices retreated in thin Asian holiday trade on Friday after hitting their highest levels of the year in response to data showing the US economy grew more than expected in the fourth quarter.

West Texas Intermediate for March delivery eased seven cents to $98.16 a barrel while the European benchmark contract, Brent for March delivery, fell 10c to $107.85.

Trade was light with most Asian markets closed for the Lunar New Year holiday.

Prices jumped on Thursday after the US Commerce Department said the world's number one economy - and biggest crude consumer - expanded 3.2% in October-December, much better than the 3.0% projected by analysts.

Adding to the upbeat data was a 3.3% rise in consumer spending, which is a crucial driver of growth in the United States, suggesting demand for crude could pick up.

Akio Shibata, president of Japan's National Resource Research Institute, said oil prices "will likely remain at relatively high levels for some time to come as demand will grow on the backdrop of a strong US economy".