Brent crude oil pared gains and fell below $110 a barrel on Tuesday, shrugging off some positive signals as traders took profits following strong gains on Monday.
Brent futures closed at $109.99 on Monday, the highest close in nearly two weeks, due in part to positive economic data from China and the United States, the world's two largest energy consumers.
But momentum stalled on Tuesday as Brent balked above the key $110 mark, traders said.
"This just looks like some profit-taking after the strong gains," said John Kilduff, partner at Again Capital LLC in New York.
U.S. crude, meanwhile, was largely unchanged as traders awaited a weekly inventory report that was expected to show a drop in U.S. crude stocks, signaling healthy consumption as the summer driving season gets under way. [EIA/S]
Brentwas down 42 cents at $109.57 a barrel at 12:04 p.m. EST (1604 GMT) after its biggest daily percentage advance in nearly two months on Monday. U.S. oil was down 3 cents at $104.38 a barrel. It had ended up 1.7 percent on Monday, its biggest daily gain since April.
The expected decline in U.S. crude stockpiles of 1.5 million barrels, according to a Reuters poll, follows data last week showing employment returned to its pre-recession peak, the latest in a string of positive U.S. economic indicators.
The American Petroleum Institute will release its inventory data later on Tuesday followed by data from the Energy Information Administration on Wednesday.
China's central bank announced on Monday that to support the economy it will cut the level of reserves that banks with sizeable loans to the farming sector and to small and medium-sized companies must hold, a development the market initially viewed as positive for crude demand.
The oil market kept an eye on producer group the Organization of the Petroleum Exporting Countries (OPEC), which meets in Vienna on Wednesday to decide oil output targets.
The cartel, which pumps a third of the world's oil, has said it is happy with global oil prices and is expected to maintain its production target at 30 million bpd.
"We're starting to see global demand pick up a pace and get stronger," said Carl Larry, CEO of consultancy Oil Outlooks in Houston, Texas. "My expectation is that the big talk tomorrow will be about spare capacity."
United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday that oil prices are at a suitable level for OPEC members and the group sees no shortage in supply:
"Oil prices have been steady over the past period and at a comfortable level for all members."
Libyan Oil Minister Omar Shakmak agreed, saying an oil price close to $110 a barrel is good for the oil market: "It's for the benefit of producers and customers alike."
Source: Reuters
Brent futures closed at $109.99 on Monday, the highest close in nearly two weeks, due in part to positive economic data from China and the United States, the world's two largest energy consumers.
But momentum stalled on Tuesday as Brent balked above the key $110 mark, traders said.
"This just looks like some profit-taking after the strong gains," said John Kilduff, partner at Again Capital LLC in New York.
U.S. crude, meanwhile, was largely unchanged as traders awaited a weekly inventory report that was expected to show a drop in U.S. crude stocks, signaling healthy consumption as the summer driving season gets under way. [EIA/S]
Brent
The expected decline in U.S. crude stockpiles of 1.5 million barrels, according to a Reuters poll, follows data last week showing employment returned to its pre-recession peak, the latest in a string of positive U.S. economic indicators.
The American Petroleum Institute will release its inventory data later on Tuesday followed by data from the Energy Information Administration on Wednesday.
China's central bank announced on Monday that to support the economy it will cut the level of reserves that banks with sizeable loans to the farming sector and to small and medium-sized companies must hold, a development the market initially viewed as positive for crude demand.
The oil market kept an eye on producer group the Organization of the Petroleum Exporting Countries (OPEC), which meets in Vienna on Wednesday to decide oil output targets.
The cartel, which pumps a third of the world's oil, has said it is happy with global oil prices and is expected to maintain its production target at 30 million bpd.
"We're starting to see global demand pick up a pace and get stronger," said Carl Larry, CEO of consultancy Oil Outlooks in Houston, Texas. "My expectation is that the big talk tomorrow will be about spare capacity."
United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday that oil prices are at a suitable level for OPEC members and the group sees no shortage in supply:
"Oil prices have been steady over the past period and at a comfortable level for all members."
Libyan Oil Minister Omar Shakmak agreed, saying an oil price close to $110 a barrel is good for the oil market: "It's for the benefit of producers and customers alike."
