* Goldman told clients to take profit before markets reverse
* Technicals show further retracements for Brent and U.S.
oil
* Coming up: API petroleum stocks; 2030 GMT
(Recasts, Adds quotes, background, updates prices)
By Chikako Mogi and Risa Maeda
TOKYO, April 12 (Reuters) - Brent crude fell to around $123
a barrel on Tuesday, extending overnight losses, on concern high
fuel prices will destroy demand and after Goldman Sachs advised
investors to lock in commodity trading profits.
ICE Brent crude for May <LCOc1> fell nearly 1 percent to
$123.05 at 0633 GMT, paring losses from a low of $121.97 after
hitting a 2-1/2 year peak of $127.02 a barrel on Monday.
U.S. crude for May delivery <CLc1> fell 1.2percent to
$108.63 a barrel. Earlier, prices dipped to $107.87 after having
touched a 2-1/2 year high on Monday at $113.46.
Pressure on prices emerged after long-term commodity bull
Goldman advised its clients on Monday to take profit as there is
a strong chance that commodity prices may reverse.
[]
It noted "nascent signs of oil demand destruction in the
United States" that could drag prices down, as well as the
possibility of a Libya ceasefire. The bank also said Nigeria's
elections, which had added further risk to oil markets, had thus
far not caused supply disruptions.
"Open interest has been building up since the start of the
new quarter in April, reflecting fresh inflows of speculative
money into the oil market," said an energy analyst at a leading
Japanese trading house who declined to be named.
"The Goldman report put a damper on this flow, at least for
now, given that there was a sense of an overshoot in the
market," he said.
The International Monetary Fund warned in its World Economic
Outlook on Monday that soaring oil prices and inflation in
emerging economies pose risks to the world economy but are not
yet strong enough to derail it. []
"The IMF's change of view on the U.S. economy is a catalyst
which suggest high costs of imports will affect economic
growth," said Jonathan Barratt, managing director Commodity
Broking Services in Sydney.
Demand concerns also heightened in No. 3 oil consumer Japan,
where the evacuation zone around its damaged nuclear plant was
expanded because of high levels of accumulated radiation, as a
strong aftershock rattled the area. []
DEMAND, MIDDLE EAST
Weekly oil inventory reports will offer a fresh snapshot of
U.S. demand and stockpiles. Analysts surveyed on Monday expected
crude stocks to have risen last week, with distillate stocks
dipping and gasoline stocks dropping.
Oil data from industry group the American Petroleum
Institute is due at 4:30 p.m. EDT (2030 GMT) on Tuesday.
Support for the market comes on continued unrest in Libya,
which has cut export supplies from the OPEC member. An African
bid to halt Libya's civil war collapsed on Monday after Muammar
Gaddafi's forces shelled a besieged city and rebels said there
could be no deal unless he was toppled. []
The U.S. Commodity Futures Trading Commission said that as
of last Tuesday, hedge funds and other financial traders held a
total net-long positions in U.S. crude contracts equivalent to a
near record 267.5 million barrels.
"This could be interpreted as an overbought level," ANZ's
analyst Serene Lim said. "If there is bearish sentiment in the
market, it may trigger a sell-off, and a cycle of long
liquidation."
With Libyan production curbed sharply, Saudi Arabia has
raised output. A senior Gulf source dismissed doubts among
analysts about Saudi Arabia's claimed 12.5 million barrels per
day capacity, saying such doubts were the work of speculators
trying to manipulate oil prices. []
(Additional reporting by Florence Tan in SINGAPORE; Editing by
Ed Lane)
