The price of oil slipped slightly on Tuesday as the market weighed potentially weaker global economic growth against continued disruptions of Libyan crude supplies.
Benchmark oil for May delivery fell 41 cents to close at $99.19 in New York. Brent crude, used to set prices for international varieties of crude used by many U.S. refineries, rose 7 cents to close at $106.99 in London.
U.S. and Brent crude have hovered in narrow ranges over the past week as supply and demand concerns have balanced each other out. Global supplies have tightened somewhat as Libyan crude exports have fallen, but the world may need less oil if economic growth in China and Russia slows.
Energy analyst Jim Ritterbusch wrote in a report Tuesday that trading patterns were sending off “signals of a balanced oil market.”
The U.S. and other Group of Seven countries vowed to launch coordinated sanctions on key parts of the Russian economy, which could include the energy industry, if Russian President Vladimir Putin presses further into Ukraine after the annexation of the Crimean Peninsula. While that could eventually reduce Russian oil production, it could also reduce Russian demand for diesel, gasoline and jet fuel if the sanctions crimp the Russian economy.
A report on factory activity in China fell to an eight-year low in March, suggesting a further slowdown of the world’s second-biggest economy and a possible decline in oil demand growth. A similar index for the U.S. fell from a four-year high.
The Libya oil industry, meanwhile, continues to have production problems. The flow of its high-quality crude, which is coveted by European refiners, has been on-again, off-again since the 2011 civil war which ousted Moammar Gadhafi. For now, it has all but dried up.
“Apart from the offshore fields, the production in (Libya) is now basically out,” said Olivier Jakob of Petromatrix in Switzerland.
Prices could retreat further if forecasts for a tenth consecutive increase in U.S. stockpiles of crude oil are confirmed. Data for the week ended March 21 are expected to show a build of 2.6 million barrels in crude oil stocks and a decline of 1.8 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The oil supply report from the Energy Department’s Energy Information Administration will be out on Wednesday.
The average retail price of gasoline rose less than a penny to $3.53 per gallon, according to AAA, OPIS and Wright Express. The average has risen 10 cents over the last month, though it is 14 cents lower than last year at this time.
In other energy futures trading on Nymex:
- Wholesale gasoline fell 0.4 cents to close at $2.882 a gallon.
- Heating oil rose 1.1 cents to close at $2.921 a gallon
- Natural gas rose 13.5 cents to close at $4.411 per 1,000 cubic feet.
AP Writer Pablo Gorondi contributed to this report from Budapest.