North Sea Brent crude-oil prices settled below $100 a barrel Tuesday for the first time since July, on expectations of slow growth in global demand for oil.
Reformulated gasoline prices snapped a four-day losing streak ahead of a weekly report on the amount of fuel stored in the U.S.
The European benchmark has been battered by forecasts for reduced consumption and by heavy refinery maintenance work in Europe and Asia that is slashing near-term demand. At the same time, rising U.S. crude output from shale-oil fields is pushing domestic supplies to 20-year highs and reducing the need for imported crudes like Brent in the key Gulf Coast refining hub.
"There is so much North American oil moving into the refineries its taking a toll on Brent," said Gene McGillian, broker and analyst at Tradition Energy.
June-delivery Brent crude oil on the InterContinental Exchange fell 72 cents, or 0.7%, to settle at $99.91 a barrel, the lowest price since July 10. The contract recovered from an intraday low of $98 a barrel as U.S. crude-oil prices shed losses late in the day.
Light, sweet crude oil on the New York Mercantile Exchange settled 1 cent higher, at $88.72 a barrel, after falling 6.3% over the prior three days to the lowest level since Dec. 24.
Analysts expect upcoming U.S. oil inventory data to show crude stocks rose again last week by 900,000 barrels. The U.S. Energy Information Administration will release the data Wednesday.
Traders said expectations that gasoline inventories would fall by 500,000 barrels boosted gasoline futures prices and provided carryover support for U.S. crude prices. Analysts also expected refinery runs would be unchanged in the week and distillate stocks (diesel/heating oil) would fall by 500,000 barrels.
Late Tuesday afternoon, the American Petroleum Institute reported crude oil stocks fell 6.655 million barrels, while refinery runs dropped 0.5 percentage point. Gasoline stocks rose 253,000 barrels, while distillate stocks rose 1.26 million barrels, the trade group said.
Reformulated gasoline for May delivery settled 2.42 cents, or 0.9%, higher, at $2.7818 a gallon, after shedding 18.5 cents over the past four sessions.
Forecasters sounded the warning last week that global demand wouldn't gain as much as expected, sending prices tumbling. Weaker-than-expected growth in China--the world's second-biggest oil consumer and the engine of growth for oil demand--reported Monday spurred furious selling.
Goldman Sachs on Monday dropped its bets on rising Brent prices, saying it "will re-evaluate the opportunities once we get more clarity on the state of European demand."
Barclays on Tuesday said it couldn't rule out Brent falling to $90 a barrel soon but said European and Asian refinery maintenance, now cutting about 6.8 million barrels a day of global crude-oil demand, will return by the third quarter, lifting demand and prices.
The May heating-oil contract settled 2.27 cents, or 0.8%, lower, at $2.8065 a gallon. Prices fell 15.5 cents over the past five trading sessions.
Copyright (c) 2012 Dow Jones & Company, Inc.
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