Gulf News reported that oil prices fell pressured by economic uncertainty ahead of a possible debt deal in Greece, concerns about China's sluggish manufacturing sector and weak US petroleum demand.
China's manufacturers had a sluggish start to the year, a survey of purchasing managers showed, weighing on oil and also on copper prices.
Analysts and broker said that news that major powers seeking to negotiate an end to Iran's suspected pursuit of nuclear weapons are soon to lay out what Tehran would need to do return to talks added to pressure on oil prices.
Mr Phil Flynn analyst at PFGBest Research in Chicago said that "There are questions about Europe as far as [oil] demand and the weak US gasoline demand numbers indicate the economy may not be doing as well as thought."
Mr Flynn said that "Signs of slowing in Chinese manufacturing didn't help and there are signs that there are efforts to take some of the tension out of the air on Iran."
In London, ICE Brent March crude settled at USD 109.86 per barrel, sliding USD 1.69 or 1.52% having fallen intraday to USD 109.42 below front month Brent's 100 day moving average at USD 109.62. For the week, front month Brent fell 58 cents or 0.53%.
US February crude settled at USD 98.46 dropping USD 1.93 having fallen intraday to USD 97.91, pushing below the 50 day moving average at USD 99.07. For the week, front month US crude dipped 24 cents.
US crude's deficit to Brent widened to USD 11.53 at the close from USD 11.01. Total Brent trading volume slipped 12% from its 30 day average. Total US crude dealings were up 22% from the 30 day average.
A planned reversal of the Seaway crude oil pipeline in the US is being delayed two months to June 1, pushing back near term expectations that the US Midwest crude oil glut will be eased.
The EIA data showed that US gasoline and heating oil both weakened after Thursday's weekly oil data from the Energy Information Administration showed rising gasoline and total distillate stockpiles and weak demand. US gasoline demand last week plummeted to the lowest level in more than a decade.
The industry group American Petroleum Institute said that petroleum consumption in December declined 5.9% versus December 2010 and total 2011 demand fell 1.2% to an average of 18.9 million barrels per day compared with the previous year.
Japan pledged to keep cutting purchases of Iranian crude, the clearest public offer of support yet among Asia's big buyers for US efforts to get consumer nations to stop buying Iran's oil.
A senior Brussels official said that European Union foreign ministers will assure Greece tomorrow that it will still be able to buy oil on reasonable terms after the introduction of a planned EU ban on Iranian crude.
EU ministers meet tomorrow and are expected to announce sanctions on importing Iranian oil. The expected statement on what terms talks with Iran could be started by major powers Britain, China, France, Germany, Russia and the US would be the latest signal the diplomatic path remains open to Iran despite tougher sanctions and speculation of a military strike on its nuclear facilities.
(Sourced from Gulf News)
