* Caterpillar warns on faster pace of economic slowdown
* North Sea Buzzard field restart delayed
* U.S. November crude contract expires
* Coming up: API oil data 4:30 p.m. EDT Tuesday
(Releads, updates prices, market activity)
By Robert Gibbons
NEW YORK, Oct 22 Oil prices fell on Monday as
economic concerns and expected production and pipeline restarts
weighed on crude futures and offset support from fears the
turmoil in the Middle East may threaten the region's supply.
Brent crude prices fell a fifth straight session and the
front-month U.S. November contract expired and went off the
board lower as a warning from industrial equipment giant
Caterpillar Inc on a global economy slowing faster than
expected and data showing Japanese exports tumbled pressured
"I think the outlook from Cat is weighing on the overall
demand outlook for oil, helping to push prices lower," said John
Kilduff, partner at Again Capital LLC in New York.
TransCanada Corp's expectation that on Monday it
will restart its Canada-to-U.S. Keystone crude oil pipeline
added pressure on crude oil futures.
Crude prices, especially Brent, were supported as fighting
in Lebanon and Gaza and protests in OPEC-exporter Kuwait
reinforced concerns about the potential for disruption of Middle
East oil supply.
Maintenance-curbed North Sea production, the fear premium
associated with Middle East turmoil and recent central bank
moves to stimulate sputtering economies have combined to support
crude futures, while uncertainty about Europe and slowing growth
in China have weighed on oil prices.
Brent December crude fell 70 cents to settle at
$109.44 a barrel. The session low of $109.12 was the lowest
Brent price since Oct. 4.
The North Sea Buzzard oil field, Britain's largest, is
expected to restart on Oct. 25 or 26 after a maintenance
shutdown, a trade source said, as many as three days later than
Also lending support to Brent, Royal Dutch Shell
said it has declared force majeure on exports from Nigeria of
Bonny and Forcados crude grades.
Expiring U.S. November crude fell $1.32 to go off the
board at $88.73 a barrel, back below $89.97, the 100-day moving
average, a technical level monitored by chart-watching analysts
U.S. December crude fell $1.79 to settle at $88.65.
Brent's premium to U.S. crude CL-LCO1=R remained above $20
a barrel, ending at $20.79 based on December settlements after
slipping to $19.08 during the session.
Trading volumes for Brent and U.S. crude lagged their 30-day
average by more than 15 percent.
U.S. heating oil fell more than 5.78 cents to
settle at $3.0767 a gallon, back below its 50-day moving average
of $3.1413. Monday's $3.0735 session low, like Brent crude, was
the weakest price since Oct. 4.
U.S. RBOB gasoline also fell nearly 2 percent,
dropping 4.88 cents to settle at $2.6475 a gallon.
Crude oil and gasoline inventories in the United States are
expected to have risen last week, with total distillate stocks
expected to be slightly lower, a Reuters preliminary survey of
analysts on Monday showed.
MIDDLE EAST VIOLENCE
At least seven people were killed and dozens wounded in gun
battles in Lebanon, violence touched off by the assassination of
a senior intelligence officer last week.
The crisis in Lebanon underscores concerns that the
19-month-old uprising against Syria's President Bashar al-Assad
is increasingly dragging in neighboring countries. Recent
artillery exchanges on the Turkey-Syria border highlighted the
danger for the region's oil infrastructure.
"(The tensions) destabilize the whole region and therefore
have an impact on oil transportation, especially the oil from
northern Iraq, which is transported through pipelines over the
crisis region," said Carsten Fritsch, an analyst at Commerzbank
Israeli forces killed two Palestinian militants during an
incursion in the northern Gaza Strip that touched off clashes
with gunmen from the governing Hamas movement.
Police in Kuwait used teargas, stun grenades and baton
charges on Sunday to disperse tens of thousands of demonstrators
protesting changes to the electoral law which the opposition has
called a constitutional coup by the government.
Iran followed the United States on Sunday in denying that
the two countries had scheduled direct bilateral negotiations on
Iran's controversial nuclear program.
The New York Times, quoting unnamed U.S. administration
officials, said on Saturday that U.S. and Iranian officials had
an agreement "in principle" to hold one-on-one talks.
(Additional reporting by Alice Baghdjian in London and Manolo
Serapio Jr in Singapore; Editing by Marguerita Choy and Bob