NEW YORK Crude futures fell on Tuesday as worries about lackluster demand and fading prospects for more monetary stimulus from the U.S. central bank countered concerns about potential supply disruptions.
Federal Reserve policymakers appear less inclined to implement any more monetary stimulus as the U.S. economy gradually improves, according to minutes for the central bank's March meeting.
Oil prices also felt pressure from news that, according to industry sources, Saudi Arabia is likely to maintain high oil production in the event consumer countries release strategic oil reserves.
U.S. retail gasoline demand fell 0.7 percent last week versus the previous week and was down 3.5 percent compared to the year-ago period, MasterCard said in its weekly report.
But the dismal demand report did not prevent RBOB gasoline futures from settling higher. Gasoline has been supported by inventory drops as fuel with winter specifications is drawn down. Also, recently shut U.S. refineries and maintenance at others provided support.
U.S. crude oil inventories rose 7.8 million barrels in the week to March 30, the industry group American Petroleum Institute said on Tuesday, a much larger increase than expected. <API/S>
Gasoline stocks fell 4.5 million barrels and distillate stocks fell 1.4 million barrels, the API said.
Ahead of weekly reports on U.S. oil inventories, crude oil stocks were expected to have risen last week by 2.2 million barrels, a Reuters poll of analysts showed.
Gasoline stockpiles were expected to be down 1.4 million barrels and distillate stocks were estimated to be down 400,000 barrels, the survey showed.
On the New York Mercantile Exchange, May crude fell $1.22, or 1.6 percent, to settle at $104.01 a barrel, having traded from $103.59 to $105.18.
Islamist militants have claimed responsibility for blowing up an oil pipeline in southern Yemen late in a second such attack in retaliation for a U.S. drone strike that killed five suspected al Qaeda militants.
Japanese refiners have secured a clause in annual contracts with Iran that exempts them from incurring a penalty if international sanctions prevent crude buyers from taking delivery of Iranian oil, industry sources said.
At least seven cargoes of North Sea Forties crude loading in April have been delayed, trading sources said, following production problems including the shutdown of Total's (TOTF.PA) Elgin platform.
Russian and Kazakh oil exports via the Caspian Pipeline Consortium (CPC) declined by 3.5 percent in March from the previous month, CPC said, without citing a reason for the drop.
U.S. stocks fell, with the S&P 500 retreating from four-year highs, after the Federal Reserve said it was less inclined to provide more economic stimulus. .N
The dollar leaped against the euro and yen as minutes from the Federal Reserve's March policy meeting weakened expectations of more stimulus measures from the U.S. central bank. <USD/>
Copper edged lower in thin conditions, backing away from a near two-month high as another large build in warehouse stockpiles withdrew some of the bullish momentum from Monday's upbeat U.S. and Chinese manufacturing data. <MET/L>
U.S. Energy Information Administration oil inventory data due at 10:30 a.m. EDT (2.30 p.m. GMT) on Wednesday.
U.S. Energy Information Administration natural gas storage data due at 10:30 a.m. EDT (2.30 p.m. GMT) on Thursday.
SETTLE NET PCT LOW HIGH CURRENT DAY AGO
CHNG CHNG VOL VOL CLc1 104.01 -1.22 -1.2% 103.59 105.18 231,582 278,097 CLc2 104.55 -1.21 -1.1% 104.14 105.70 68,253 68,170 LCOc1 124.86 -0.57 -0.5% 124.30 125.97 187,868 229,530 RBc1 3.3954 0.0132 0.4% 3.3659 3.4278 53,109 76,259 RBc2 3.3146 0.0009 0.0% 3.2929 3.3439 49,654 49,164 HOc1 3.2275 -0.0221 -0.7% 3.2178 3.261 41,770 60,350 HOc2 3.2351 -0.0211 -0.7% 3.2259 3.2666 25,029 27,721
TOTAL MARKET VOLUME OPEN INTEREST
CURRENT Apr 02 30D AVG Apr 02 NET CHNG
CRUDE 515,038 522,553 608,983 1,562,665 -11,731
RBOB 178,196 218,594 149,044 347,674 -129
HO 114,312 127,617 140,210 280,831 5,135
(Reporting by Robert Gibbons and Bob Burgdorfer)