Singapore, Jan 05 (Agencies): Oil was down in Asian trade on Wednesday as investors moved in to take profits following a rally that took the commodity to two-year highs.
New York's main contract, light sweet crude for February delivery, dipped 38 cents to USD 89 per barrel.

Brent North Sea crude for February was down 49 cents at USD 93.04.

Oil prices were also hampered by a late rebound in the US currency, which makes dollar-priced crude more expensive for buyers using weaker currencies. In turn, that tends to dent demand and prices.

But the price decline is seen limited as demand is expected to pick up amid growing optimism for the global economy, especially for the US, the world's biggest oil consumer.

"The industry fundamentals supporting (oil demand) growth are not changing. I continue to be optimistic about the oil prices for 2011," said John Vautrain, vice president for Purvin and Gertz international energy consultants in Singapore.

US manufacturing activity grew for the 17th straight month in December, bolstering confidence that the US economic recovery was gaining momentum while construction spending rose 0.4 per cent in November to reach its highest point in five months.

Meanwhile, investors were looking ahead to this week's snapshot of US energy inventories and economic data, as well as a raft of key European data.