Oil turns lower on expectations of crude oil inventory rise
By Robert Gibbons
NEW YORK (Reuters) - Crude oil futures fell on Tuesday as expectations that this week's reports will show U.S. crude inventories rose again countered supportive news of Libyan oilfields being shut.
Prices faltered after being lifted by news the Sarir and nearby oilfields in Libya were shut by a power cut, dealing another blow to exports from the embattled OPEC member.
Greece's euro zone partners approved Greece's reform plans, also lending support to oil, but the prospect of another build in U.S. oil inventories highlighted an over-supplied market and countered the supportive news.
"The supply dynamic will be reinforced by the inventory reports and the data are simply too compelling to ignore, and it has consistently undermined the recent rallies," said John Kilduff, partner at Again Capital LLC.
Brent April crude LCOc1 fell 24 cents to settle at $58.66 a barrel, after reaching $60.30. U.S. April crude CLc1 fell 17 cents to settle at $49.28, off a $50.33 intraday peak.
Ahead of Friday's March contract expirations, a squeeze on benchmark U.S. ultra-low sulfur diesel (ULSD) futures eased on Tuesday.
March ULSD HOc1 plunged more than 18 cents, sharply reducing its premium HOc1-HOc2 to April ULSD.
"The fundamental backdrop is still bearish," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding there was a "huge over-supply in the market." Continued...