Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

U.S. oil falls to 3-week low; China slowdown weighs

Send a link to a friend  Share

[March 11, 2014]  By Jeanine Prezioso and Elizabeth Dilts

NEW YORK (Reuters) U.S. oil fell by more than $1 per barrel on Monday to a three-week low, pressured by an unexpected drop in China's exports that stoked fears of a slowdown in the world's second-largest economy.

Oil prices were weighed by moderate temperatures that reduced the need for heating fuels and refinery maintenance season in the U.S., when demand typically wanes.

U.S. commercial crude oil inventories were forecast to have risen by 2.2 million barrels on average last week, according to a Reuters survey taken ahead of weekly inventory reports from the American Petroleum Institute and the U.S. Department of Energy's Energy Information Administration.

As well, oil on both sides of the Atlantic was pressured by easing fears over the crisis in Crimea.

"We're rolling into refinery maintenance season and the market was bid up too far on the Ukrainian news," said Paul Smith, chief risk officer with Mobius Risk Group in Houston. "I see no issue with U.S. crude going below $100."

U.S. oil settled $1.46 lower at $101.12 a barrel, its lowest since Feb. 14. After two straight days of gains, Brent crude settled 92 cents lower at $108.08.

U.S. ultra low-sulfur diesel futures, more commonly known as heating oil, fell 4.5 cents to settle at $2.9674 per gallon.

With heating season coming to an end and refiners in maintenance season, traders and analysts expect that oil leaving Cushing will pool along the coast, forcing a temporary glut and capping prices until stocks are drawn down to make gasoline for summer driving season. Oil stocks in the Gulf Coast have risen every week over the last 1-1/2 months.

"We will continue to see draws out of Cushing, but I think we will see much larger builds on the Gulf Coast," said Tariq Zahir, managing member of commodity trading advisor Tyche Capital Advisors in New York.

In line with maintenance season, refinery utilization for the week ending March 7 was expected to have fallen, though by less than last week, the preliminary survey showed.

[to top of second column]

The API will release its data on Tuesday at 4:30 p.m. EDT (2030 GMT), while the EIA will publish its data on Wednesday at 10:30 a.m. EDT (1430 GMT).

China released weak data overnight that showed the No. 2 oil consumer's exports in February fell 18.1 percent from a year earlier. Many risk assets and stock markets fell on the weak data even though it likely reflects a slowdown due to the Lunar New Year holidays. Copper prices hit an eight-month low.

Oil traders seemed to put tensions in Ukraine on the back burner, though Russia's continued push to tighten its grip on Crimea was expected to keep markets volatile.

Brent oil was alternately supported and pressured by the ongoing crisis in Libya that has cut into oil output. Libya's parliament has ordered that a special force be sent within one week to "liberate" all rebel-held ports in the volatile east, officials said on Monday, raising the stakes over a blockage that has cut off vital oil revenues.

Libya's National Oil Company said production had restarted at the El Sharara field which feeds export terminals in the west and might reach full capacity on Tuesday afternoon.

(Additional reporting by Lin Noueihed in London and Manash Goswami in Singapore; editing by Marguerita Choy, Bernadette Baum and Phil Berlowitz)

[ 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

< Recent articles

Back to top