Oil prices fell by a dollar this afternoon after an unexpected fall in US jobs data heightened fears of a recession in the United States, the world's top oil consumer.
US light crude for April delivery was $1.30 lower at $104.17 a barrel at 15.11pm. It had hit a new record high of $105.97 yesterday.
London Brent crude was down 97 cents at $101.64.
"The market is concerned that weakness in the US economy could lead to weakness in US oil demand," said Mike Wittner, global head of oil research at Societe Generale.
Wittner said the fall could be a kneejerk reaction, as the oil market has recently ignored bearish US economic data, seeing it leading to interest rate cuts and weakness in the dollar which in turn has led to higher oil prices.
Oil prices received support earlier from the falling dollar which slid to new record lows on Friday against the euro and the Swiss franc.
A steady decline in the US dollar has been a factor pushing prices higher along with fund flows into commodity markets as investors seek a hedge against inflation.
Oil prices jumped this week after a surprise fall in crude stocks in top oil consumer the United States and after OPEC decided against changing output policy at its meeting in Vienna, despite consumers' calls to pump more oil.
The oil exporters' group, which pumps more than a third of the world's oil, has long argued high oil prices do not reflect oil market fundamentals and are being driven by speculation.
Influential Saudi Oil Minister Ali al-Naimi reiterated the view in remarks published today, saying speculation was behind triple-digit oil and made it impossible for any organisation to control price movements.
"Today there is no link between oil (market) fundamentals and prices," he told Moroccan newspaper Asharq al-Awast.