* Brent-WTI spread settles below $9 for first time since
* Brent oil down over 7 pct, biggest monthly fall since May
* Coming Up: EIA data, Wednesday 10:30 a.m. EDT (1530 GMT
By Anna Louie Sussman and Jonathan Leff
NEW YORK, April 30 World oil prices fell 1.4
Percent on Tuesday, posting their biggest daily decline in
almost two weeks after U.S. data showed Midwest business
activity contracted in April and a European report showed record
A survey showing a rebound in supply from OPEC producers in
April further pressured prices a day after they had rallied up
to $104. In mid-April, Brent crude oil hit a nine-month low
below $97, and ended down more than 7 percent for the month, its
biggest monthly decline in 11 months.
The spread between Brent and U.S. crude also
narrowed further, closing below $9 a barrel for the first time
since December 2011 after a volatile session marked by news of
brief outages in one of the key North Sea oil fields and along a
major Canada-to-U.S. oil pipeline.
Brent fell $1.44 to settle at $102.37 a barrel after
briefly going up to $104. U.S. crude settled $1.04 lower
at $93.46 a barrel, ending the month down 4 percent.
Both extended losses in post-settlement trading, with Brent
reaching a low of $101.48 and crude falling to $92.86.
Prices were little moved by data from the American Petroleum
Institute showing U.S. crude stocks rose by 5.2 million barrels,
much larger than a forecast 1 million barrel build.
The more closely-watched report from EIA will be released
Wednesday morning at 10:30 a.m. EDT (14:30 GMT).
The Brent/WTI spread fell by as much as 80 cents to a low of
$8.51 in post-settlement trading, down from more than $23 in
February 2013 as Cushing oil inventories drained.
On Tuesday, the spread was volatile, whipsawed by news that
the Buzzard oil field in the North Sea would resume production
within 24 hours of an unexpected Monday night shutdown.
The spread briefly widened at mid-afternoon U.S. time after
industry group Genscape reported a drop in pumping volume along
a segment of the 590,000-barrel-per-day Keystone pipeline from
Canada to the United States. But operator TransCanada Corp later
said that the line had already been restarted after brief
maintenance on a piece of electrical equipment.
"There's a lot of volatility in the spread. We might have
seen some people who timed the spread correctly looking to take
profits," said Gene McGillian of Tradition Energy in Stamford,
Business activity in the U.S. Midwest unexpectedly
contracted in April to its lowest level since September 2009,
according to the ISM-Chicago Business survey, which followed
weaker-than expected U.S. first-quarter growth data released
"This morning the motivating factor is the less-than-stellar
Chicago purchasing report. This is industrial, it's the Midwest.
Clearly with that report coming out at less than 50, then down
went crude," said Dennis Gartman, editor of The Gartman Letter.
Oil traders are looking ahead to see if economic stimulus
measures are forthcoming from U.S. and European central banks.
At the U.S. Federal Reserve meeting on Tuesday and
Wednesday, policy makers are expected to affirm the central
bank's bond-buying plan. The market will also watch this week
for a rate cut form the European Central Bank.
Ongoing stimulus could spark investor buying interest, but
it "may not revive physical demand for actual gasoline and
diesel fuel," noted Tim Evans, energy analyst at Citi Futures
Perspective in New York.
In the U.S., the world's top oil consumer, economic growth
was lackluster in the first quarter, raising fears the economy
could struggle to cope with Washington's austerity drive.
GLOBAL DEMAND WORRIES
European data on Tuesday showed inflation in the euro zone
has fallen to a three-year low and unemployment has hit a record
of 12.1 percent.
German retail sales fell for the second month running in
March, and Spain's economy shrank for the seventh straight
quarter from January to March, preliminary data showed. Spain's
recession looks set to last into next year.
"In the last couple of weeks economic data all over the
world has capped the upside, and until data shows a strong
rebound, there's little chance for a bounce back," said Andy
Sommer, analyst at EGL in Dietikon, Switzerland.
There was bearish news on the supply side of the equation
too, with supply from the Organization of the Petroleum
Exporting Countries set to average 30.46 million barrels per day
(bpd), up from 30.18 million bpd in March, according to a
In a speech on Tuesday, Saudi Arabia's energy minister said
the kingdom does not plan to expand its oil production capacity
to 15 million barrels per day, dispelling a suggestion put forth
by a member of his country's royal family.