Oil slips below $110 on profit taking

By Margaret Orgill

LONDON (Reuters) - Oil slipped below $110 on Friday as investors took profits after prices hit a record $111 in the previous session, but the depressed dollar was seen limiting losses.

U.S. crude for April delivery fell 47 cents to $109.86 a barrel by 11:50 a.m. It touched a record for the seventh time in a row in the previous session and is up nearly 8 percent this month and about 14.5 percent this year.

London Brent crude for April, which expires later in the day, dropped 28 cents to $107.26.

"The market is waiting to see what will happen with the dollar. The financial flows have been overwhelming the fundamentals in the oil market," said Mike Wittner, Global Head of Oil Market Research at Societe Generale.

Despite Friday's profit-taking, oil prices should continue to rise provided financial investors pump more money into the crude market, he added.

"We've consolidated at these levels. The momentum is still upwards" Wittner said.

Fundamentals in the middle distillates market -- heating oil, diesel and jet fuel -- remain strong on the back of low stocks and extensive refinery maintenance in Europe and in key suppliers to the region.

The gas oil crack, the premium of ICE gas oil futures to Brent, hit a new record high of $25.29 on Thursday in a sign of tight distillate supply situation, Wittner added.