Oil falls below $102 a barrel amid rising supplies
The price of oil dropped below $102 a barrel on Tuesday as expectations of a buildup in U.S. crude inventories dampened sentiment.
By early afternoon in Europe, benchmark U.S. crude for April delivery was down $1.18 to $101.64 a barrel in electronic trading on the New York Mercantile Exchange.
On Monday, the contract gained 62 cents as another cold spell for the U.S. Midwest and Northeast was expected to boost demand for heating oil at a time when many refineries are undergoing seasonal maintenance.
Supplies, however, also appeared to be robust, with weekly crude stocks on a rising trend. Investors are waiting for a weekly U.S. stockpile report due later this week that is likely to show further gains.
Data for the week ending Feb. 21 are expected to show a build of 1.2 million barrels in crude oil stocks and a draw of 1.5 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department’s Energy Information Administration — the market benchmark — will be out on Wednesday.
Some analysts expect oil prices to drop in the spring, when many refineries will be carrying out maintenance work, which is temporarily accompanied by lower oil demand. Jitters over an economic slowdown in China could also weigh on prices as weaker growth would reduce demand for gasoline, diesel and jet fuel.
Keeping a floor under prices was Libya’s inability to increase its oil exports and street protests in Venezuela, a major crude supplier to the U.S.
In other markets, Brent crude, which is used to set prices for international varieties of crude, was down 28 cents to $110.36 on the ICE Futures exchange in London.
On the Nymex:
— Wholesale gasoline fell 0.72 cent to $2.9998 per gallon.
— Heating oil retreated 0.77 cent at $3.0424 a gallon.
— Natural gas lost 37 cents to $5.075 per 1,000 cubic feet.