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 The United States and Europe imposed sanctions on Russian officials
after Crimea's Sunday vote to become part of Russia. The sanctions
target individuals and do not impact broad trade or financial
measures, leaving oil supplies from the second largest producer in
the world so far uninterrupted.
U.S. President Barack Obama reiterated that the West still hopes to
resolve the crisis with diplomacy and sanctions, leaving low
seasonal oil demand in the U.S. and Europe and ample global supply
to weigh on oil prices.
"The whole oil complex will retreat moderately if there is no bad
news coming out of Ukraine," said Richard Hastings, a macro
strategist at Global Hunter Securities. "There is a lot of concern
about near-term global demand."
Brent crude futures fell by $2.05 to an intra-session low of
$106.16, their lowest point since Feb. 6. The European benchmark
settled $1.97 lower at $106.24 per barrel.
U.S. crude futures fell by as much as $1.52 to a session low of
$97.37 per barrel before settling 81 cents down at $98.08 per
barrel.
New York gasoline RBOB helped pull U.S. oil lower, falling 7.9 cents
to settle at $2.8811 per gallon. U.S. refiners are at seasonal low
rates for refining gasoline as many go into maintenance to prepare
for the high demand of the summer driving season.
U.S. commercial crude inventories are expected to have risen last
week by 2.8 million barrels on average, according to a preliminary
Reuters poll taken ahead of weekly data from the American Petroleum
Institute and the U.S. Energy Information Administration, which are
set to be released Tuesday and Wednesday respectively.
Global oil prices had rallied into the weekend as traders bought
futures contracts to cover themselves against the risk that if
Sunday's vote turned violent it might impact exports from Russia.
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LIBYAN DRAMA
Libyan oil production fell to less than 250,000 barrels per day
after the El Sharara oil field stopped pumping due to a new protest,
reinforcing traders' expectations the instability there would be
protracted.
U.S. special forces troops boarded a tanker in the Mediterranean Sea
that had fled the rebel-held Libyan port of Es Sider with a cargo of
oil, halting an attempt by rebels to sell petroleum on the global
market.
And in a separate incident, a car bomb exploded outside a Libyan
army base in the eastern city of Benghazi, where the weak central
government has been battling Islamist militant groups.
Investors will also be eyeing the U.S. Federal Reserve's two-day
meeting which starts on Tuesday. Policymakers are likely to continue
the Fed's earlier decision to cut its bond-buying pace by another
$10 billion a month.
Weekly inventory data from the American Petroleum Institute will be
released Tuesday at 4:30 p.m. EDT (2030 GMT). Data from the U.S.
Energy Information Administration is set to be released Wednesday at
10:30 a.m..
(Reporting by Shadi Bushra in London and Keith Wallis in Singapore;
editing by Keiron Henderson, Chris Reese and Marguerita Choy)
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