Crude oil futures prices fell Friday in line with broader market declines as the International Energy Agency cut its estimates for global oil demand this year.
Light, sweet crude for March delivery recently traded $2.12, or 2.1%, lower at $97.72 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.86 lower at $116.73 a barrel.
Prices fell as the IEA, which represents major oil-consuming nations, cut its oil demand growth forecast for 2012 by 0.3 million barrels a day and said that the market has enough flexibility to handle the loss of Iranian oil.
The downgrade to the IEA's demand expectations follows a similar move by the Organization of Petroleum Exporting Countries earlier this week. In its monthly oil report published Thursday, OPEC slashed 120,000 barrels a day from its estimate of oil demand growth.
The IEA report took the wind out of an oil market that has risen for three-straight sessions. On Thursday, crude futures closed at the highest level in three weeks, briefly topping $100 a barrel, and traders say still-simmering tensions in Iran are keeping a bottom under prices.
Also pushing down crude Friday was a drop in the euro versus the dollar. The euro recently traded at $1.3172, down from $1.3291 earlier in the session. Euro-zone finance ministers withheld approval for a second bailout of Greece and demanded fresh proof that the country is prepared to enact new austerity measures.
The step raised new concerns about Europe's ability to stem the crisis in Greece.
A strong dollar typically pressures crude prices by making oil more expensive in other currencies.
"The euro is cracking. This is going to be a profit-taking day across the board," said Rich Ilczyszyn, a broker at II Trader in Chicago.
Declines were seen across commodities markets Friday, with oil, corn, copper and other raw materials all lower or poised to decline when markets open.
Dow Jones Industrial Average futures also fell, pointing to a decline in stocks as well.
Front-month March reformulated gasoline blendstock, or RBOB, recently traded 3.93 cents, or 1.3%, lower at $2.9735 a gallon. March heating oil recently traded 1.90 cents lower at $3.1895 a gallon.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com.