Crude oil futures tumbled by nearly $2 on Tuesday, with U.S. crude pressured by expectations for a build in domestic stocks, and Brent by lackluster manufacturing data in China and Europe.
U.S. commercial crude stocks have risen for 10 straight weeks and likely rose again last week, with a rebound in imports expected as a major oil tanker shipping channel to the Gulf Coast reopened.
Chinese government data showed that factory sector activity edged up in March, but economists said it was not enough to offset evidence of a sharper-than-expected slowdown in the first quarter in the world's No. 2 oil consumer. Growth in euro zone factories also cooled, a business survey showed on Tuesday, and firms have returned to cutting prices in order to drum up business.
delivery was down nearly $2 to under $106 a barrel. U.S. crude for May delivery slid by $1.84 to settle at $99.74 a barrel, its lowest in a week despite encouraging U.S. manufacturing data that showed the sector expanding in March.
Brent's premium over U.S. crude widened to $6.15 a barrel, after hitting $6 a barrel on Monday to match its narrowest point of the last three weeks.
Supply may rebound out of Libya soon, which would pressure Brent. On Monday, a leader with a rebel group in the east of the country told state media they may be close to reopening three oil ports, which accounted for exports of 600,000 barrels per day (bpd) before they were occupied last summer. Libya's oil exports have fallen to less than 100,000 bpd, from a post-civil war peak of more than 1 million bpd as armed militias and protesters seized and blocked facilities.
U.S. commercial crude oil stocks are expected to have risen by 2.5 million barrels on average for the week ending March 28, despite an expected upswing in refinery runs, while inventories of refined oil products were projected to have fallen, a preliminary Reuters poll showed.
For more information on commodities, please click here.