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 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.
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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)
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