LONDON - Global oil prices rose Tuesday on the eve of key US inventory data, but analysts cautioned that Brent’s recent rally was faltering. Brent North Sea crude for delivery in March added 44 cents to $118.54 a barrel in London early afternoon deals, but was some way off the nine-month peak of $119.17 that was struck on Friday. New York’s main contract, light sweet crude for March, gained 29 cents to $97.32 a barrel. “The upswing in the price of Brent is faltering,” said Commerzbank analyst Carsten Fritsch.

“Given the considerable optimism already displayed by speculative financial investors, there is increasingly little scope for Brent to rise any further.”

Brent had soared Friday on the back of healthy economic data — and owing to geopolitical concerns after crude producer Iran rejected a US offer on nuclear talks, traders said.

Meanwhile on Tuesday, dealers trod cautiously ahead of US President Barack Obama’s State of the Union speech and as eurozone finance ministers discuss a debt bailout for Cyprus.

Talk of a currency war as Japan loosens monetary policy to stimulate its economy also spooked the markets and investors took advantage of the Lunar New Year holidays in Asia for some profit-taking, analysts said.

Traders seemed to be largely unmoved by news that North Korea had carried out a threatened nuclear test despite warnings against such a move by the international community, including ally China.

“While much of Asia enjoys Lunar New Year holidays, Western markets ground lower while talk of a currency war continued,” said Jason Hughes, head of premium client management at IG Markets Singapore.

“Traders remained cautious ahead of some key events in the coming days while profit-taking crept in... President Obama gives his State of the Union address tonight while European finance ministers meet in Brussels.”

Investors were also watching a G20 gathering later this week and the results of a meeting of eurozone finance ministers on a financial bailout for Cyprus, analysts said. Cyprus is heavily exposed to Greece’s public debt crisis.