Prices fell on worries of an end to the US stimulus programme amid global economic strains and weak demand for oil in top consumer nation the US, traders said.

Oil contracts had tumbled more than $2 on Thursday as traders absorbed poor US jobs data, signs of weaker-than-expected US crude demand and a fall in eurozone business activity.

It was the second day in a row in which crude prices fell sharply. Analysts said there was a general sense that the oil market had become too buoyant given the brittle state of the economy.

"The market had some vertigo at these high levels, and the market is now correcting,” said Andy Lebow, senior vice-president for energy futures at Jefferies Bache financial group.

Brent crude had hit nine-month highs above $119 a barrel two weeks previously on healthy economic data in the US and China — the world’s two biggest economies.

But on Thursday, the US Labor Department said initial jobless claims rose to 362,000 in the week ending February 16, more than the analyst consensus estimate of 358,000. Lebow said the oil market was also watching the Federal Reserve for any potential shift in policy.

Minutes released on Wednesday by the Fed’s Open Market Committee (FOMC) showed a vigorous debate on whether to continue a bond-buying programme that many analysts believe has supported higher oil prices.

Concerns over the eurozone economy also resurfaced late in the week. A leading growth indicator on Thursday showed that private business activity across the bloc hit a two-month low in February, signalling a steepening of the economic downturn.

And on Friday, the European Commission said the eurozone faced another full year of recession in 2013, as millions more people living across the region become unemployed.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April slid to $114.19 a barrel from $117.69 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in April stood at $93.02 a barrel compared with $96.77 for the March contract the previous week.