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 China's manufacturing activity shrank in March, a preliminary
private survey showed, pointing to slowing demand in the world's
biggest energy consumer and adding to a string of weak indicators
this year that have reinforced concerns about a slowdown.
Supply concerns supported Brent oil for most of the day, on the risk
that a confrontation with the West over Ukraine could lead to a
disruption of energy supplies from Russia, a major supplier of oil
and gas to Europe.
Libyan oil exports are also running at more than 1 million barrels
per day (bpd) below capacity thanks to civil unrest.
The US benchmark West Texas Intermediate (WTI) gained support from
reports Monday that major Texas shipping channels for the delivery
of crude oil to more than one-tenth of the nation's refining
capacity were shut for a third day, as the cleanup from a spill
threatened to last through the week.
"It's a two-sided trade right now, of demand expectations versus
supply disruptions," said Phil Flynn, an analyst with the Price
Futures Group in Chicago, Illinois.
Brent crude for May fell 11 cents to settle at $106.81 a barrel. The
oil benchmark fell for a fourth straight week last week. U.S. crude
oil rose 14 cents to settle at $99.60 a barrel.
Prices for both benchmarks zig-zagged throughout the day. Brent
swung by more than $1, from a low of $106.45 to a high of $107.50.
U.S. crude covered even more ground, from $99.05 to $100.29.
"There are flows in both directions, and they don't always match
evenly, so we get some incidental price fluctuations," said Tim
Evans, energy analyst at Citi Futures Perspective.
The spread between the two benchmarks narrowed slightly, to $7.21
from Friday's close of $7.46.
Brent crude has lost 3.6 percent this year, giving up gains after
rising to $112 in early March, its highest in more than two months,
amid geopolitical risks as Russia took control of Ukraine's Crimea
region.
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It slid further in post-settlement trading, falling by 33 cents to
$106.60 by 3:11 pm EDT (1911 GMT). U.S. crude also dipped, falling 4
cents in post-settlement trading.
Concerns that tensions in the Crimea region could still worsen
helped stem declines. NATO's top military commander said on Sunday
Russia had built up a "very sizeable" force on its border with
Ukraine and Moscow may have a region in another ex-Soviet republic,
Moldova, in its sights after annexing Crimea.
Russian troops, using armoured vehicles, automatic weapons and stun
grenades, seized some of the last military facilities under
Ukrainian control in Crimea on Saturday. Russian President Vladimir
Putin formally annexed the Black Sea peninsula the day before.
In Libya, rebels have occupied ports and oilfields, depressing the
country's oil production to below 250,000 bpd, the state-run
National Oil Corp (NOC) said. The NOC said on Monday it shut the El
Feel oilfield, because the pipeline to the Mellitah port was closed.
National oil production will fall to around 150,000 bpd on Tuesday
as result, leaving almost nothing for export. An NOC spokesman said
he did not know the reason for the pipeline closure.
An oil tanker seized by U.S. forces after it loaded crude at a Libya
port held by anti-government rebels has docked back in the capital
Tripoli, a Reuters witness said on Sunday.
(Additional reporting by Christopher Johnson in London, Keith Wallis
in Singapore; editing by Susan Fenton, Keiron Henderson and Tom
Brown)
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