Oil prices down after late rally

World oil prices fell in Asian trade today after staging a late rally the previous day.

New York's main futures contract, light sweet crude for March delivery, was down 77 cents to $42.90 a barrel.

Brent North Sea crude for March delivery was down 55 cents to $44.84.

Mark Pervan, senior commodities analyst at ANZ bank in Melbourne, said the slight rally yesterday was a technical rebound and not indicative of the current market.

"It's a technical factor... Just the market crossing into a new month," Pervan said.

He was referring to the transition to New York's March contract from the February contract, which expired Tuesday.

Pervan added that the market was still bogged down by weak energy demand. He pointed to the US announcement of a significant increase in crude reserves as testament to a continuing weak global appetite for oil.

The US Department of Energy said crude inventories soared by 6.1 million barrels last week, far more than analyst expectations for an increase of around two million barrels.

The United States said new unemployment claims hit a 26-year high in the past week while housing construction and building permits fell to half-century lows in December.

Mike Fitzpatrick, an analyst at MF Global, said the market was almost inured to any more bleak economic news.

"In fact, a look at the technicals, which by definition ignore news, reveal many positive signs," he said.