February 11, 2013 / 1:05 PM / in 5 years

UPDATE 6-Brent oil falls after U.S. blizzard; Europe worries drag

* RBOB contract leads losses after snowstorm
    * Iran nuclear fuel move may avert mid-year crisis

 (Updates with settlement prices)
    By Gabriel Debenedetti
    NEW YORK, Feb 11 (Reuters) - Brent crude oil futures fell on
Monday, with gasoline futures leading losses after last week's
blizzard in the U.S. Northeast, one of the world's biggest
gasoline markets, is expected to have had little impact on
regional fuel supplies.
    Investors' concerns about the health of the euro zone
economy also outweighed confidence stemming from
stronger-than-expected demand growth in China revealed last
    "(U.S. refined) products are lower because they went up last
week on fears the blizzard would harm refineries or
infrastructure, but the storm just caused demand destruction,"
said Phil Flynn, analyst at Price Futures Group in Chicago.
    Brent lost 77 cents to settle at $118.13 a barrel,
after slipping to $117.54 in early trade. U.S. crude rose
$1.31 to $97.03 a barrel, and RBOB gasoline lost more
than 3 cents to $3.0212 a gallon.
    Brent's premium over U.S. crude contracted from $23.18 at
Friday's settlement to $21.10.
    After the blizzard dropped up to 40 inches (1 meter) of snow
with hurricane-force winds on the U.S. Northeast, hundreds of
thousands of people were left without power and many stayed off
the roads. 
    Much of Monday's market action was due to traders unwinding
spread trades put in place last week or earlier in the month, 
said Richard Ilczyszyn, chief market strategist at iitrader.com
LLC in Chicago.
    Oil markets are expected to see limited trade this week as
many Asian markets are shut because of the Lunar New Year. Brent
hit a nine-month high on Friday, capping a fourth consecutive
week of gains, after data showed Chinese trade surged in
    While Chinese growth is supporting oil prices, developments
in the euro zone threaten to weigh further on equities and the
euro. A corruption scandal is threatening political instability
in Spain and the outcome of Italy's upcoming election is
becoming less certain. 
    This week, Germany, France and Italy will release the latest
quarterly figures on gross domestic product, which are expected
to point to a contraction in the three major European economies.
    Analysts said oil prices could weigh on a euro zone recovery
after the recent rally in Brent, which was supported by positive
economic sentiment.
    Supply worries in the Middle East eased slightly with news
that Washington and Tehran may have more time to negotiate over
Iran's disputed nuclear programme after reports that Iran
appears to have resumed converting small amounts of its
higher-grade enriched uranium into reactor fuel. 

 (Additional reporting by Robert Gibbons in New York, Ron Bousso
and Alex Lawler in London, and Rebekah Kebede in Perth; Editing
by Dale Hudson, James Jukwey and Sofina Mirza-Reid)

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