(Updates prices, adds comment, changes dateline)
LONDON, April 1 (Reuters) - Oil fell to near $101 on
Tuesday, extending losses from the previous session on selling
by funds and a strengthening U.S. dollar, but supported by
expectations of a drop in U.S. gasoline stocks.
U.S. crude <CLc1> dropped 67 cents to $100.91 a barrel by
1001 GMT, after Monday's $4.04 decline on end-of-quarter
selliong by funds. London Brent <LCOc1> rose 3 cents to $100.33
a barrel.
Gas oil futures <LCOc1> were especially weak, dropping
nearly 4 percent to $931 a tonne, bringing them in line with
Monday's steep fall in crude prices and as the heating oil
season draws to a close.
Average oil futures prices have surged to new record highs
during the first quarter, with the average for U.S. crude up 68
percent on a year-earlier and 8 percent higher than the
preceding quarter.
Funds sold out of oil positions in droves on Monday to take
profits at the end of the first quarter, as a week of heavy
fighting in Iraq's oil port city of Basra ended and officials
predicted a recovery in crude exports from the hub within a day.
The market's focus turned to the weekly U.S. oil inventories
data, due out on Wednesday and expected to shed more light on
the prospects of oil demand in the world's top fuel consumer,
which, according to some, is in the grips of a recession.
"People are looking at U.S. gasoline demand and how stocks
can be accumulated before the summer driving season. It depends
on the U.S. economy," said Tetsu Emori, a Tokyo-based fund
manager at Astmax Co Ltd.
Gasoline inventories in the United States are forecast to
have fallen by 2.3 million barrels last week, the third straight
week of decline, a Reuters poll found. []
Distillate stocks, which include heating oil and diesel,
were likely to drop 1.5 million barrels, but crude oil stocks
are forecast to rise 2.3 million barrels due to higher imports.
Worries that the credit crisis and the wider economic
problems of the United States could drag down demand growth have
weighed on prices.
U.S. oil demand in the past four weeks is on average 2.2
percent less than year-ago levels, recent government data
showed.
However, some analysts say the market undertone was bullish.
"Oil supply estimates continue to edge downwards, with
non-OPEC in a battle royale to get any growth this year. In this
context, any demand growth whatsoever in 2008 should be
seen as bullish," Citi analysts said in a note.
The U.S. dollar rose versus the Swiss franc, the euro and
sterling on Tuesday after European bank UBS announced an
additional $19 billion of writedowns, highlighting that credit
market woes are not just a U.S. problem.
On Tuesday, shipping agents said Iraq's southern oil exports
stood at around 1.4 million barrels per day (bpd). Iraq pumps
about three quarters of its exports, or an average of 1.5
million bpd, from the Basra terminal. []
(Additional reporting by Felicia Loo in Singapore, Editing by
William Hardy)
