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Brent Crude Drops Below $100 for First Time Since July

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Brent crude fell below $100 a barrel for the first time in nine months in heavy trading on Tuesday, extending losses triggered by data from China and the United States that suggested little growth in global oil demand.

Both Brent and U.S. crude pared losses in afternoon trading after each fell more than $2 earlier, suggesting that the low prices could be luring back traders, analysts said. U.S. RBOB gasoline edged up slightly, turning a corner after four consecutive days of losses.

"RBOB is the leader, so with RBOB pushing a little higher, that's telling us that the market is oversold and we're getting into a value area," said Richard Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.

"Were seeing the bargain hunters come in," he said.

Prices of Brent crude oil have fallen in 9 of the past 11 trading sessions, down nearly 13 percent from the beginning of the year.

"We are still seeing some weakness in price, in contrast to a number of markets that are snapping back to the upside with more vigor. That's because we still have a lot of oil," said Tim Evans, an energy futures specialist at Citi Futures Perspectives in New York.

Brent crude futures was down $0.91 at$99.72 per barrel. It earlier hit $98.00, the lowest level since July 2012.

U.S. light, sweet crude for May delivery settled up by a cent at $88.72 a barrel after hitting a low of $86.06, its weakest since December 2012.

Total Brent crude trading volumes exceeded a million lots and were 55 percent above its 30-day average U.S. trading. The volume for U.S. crude exceeded its 30-day average by 33 percent.

The relative strength index (RSI), a technical momentum indicator, was at 31 for U.S. crude, and 25 for Brent. A reading of 30 or below indicates an oversold condition to chart-watching traders.

"Limited Demand Prospects"

Brent crude on Monday dropped about three percent in a wider commodities rout after data showed economic growth in China, the world's second-largest oil consumer, had slowed unexpectedly in the first three months of 2013.

A U.S. regional manufacturing report showing the pace of growth slowed more than expected in April and another report of waning U.S. homebuilder sentiment put further pressure on prices. A powerful earthquake that struck southeast Iran, sending strong tremors across the region raised concerns it might damage oil production, which put a floor under oil prices, traders said.

The U.S. posted strong housing-start numbers Tuesday, a bright spot for the economy of the world's largest oil consumer, but insufficient to turn oil sentiment bullish. Earlier in the session, gold fell to a more than two-year low and Brent lost $2.63. Gold and other metals, including copper, later bounced back.

Underscoring recent worries, the International Monetary Fund on Tuesday shaved projections for global economic growth for this year and next on the back of spending cuts in the United States and Europe. In the euro zone, annual inflation fell to 1.7 percent in March, in line with market expectations, but still lower than the European Central Bank's target of close to 2 percent.

The oil market was waiting for weekly oil inventory data from the United States for trading cues. A preliminary survey of analysts by Reuters forecast U.S. crude stocks rose by 1.3 million barrels for the week ended April 12.