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Crude gets no new year's cheer, sinks $3 as negatives mount

Thursday, 2 Jan 2014 | 2:44 PM ET

U.S. crude oil futures fell $3 minutes before the close of trading on Thursday, pressured by expectations for a build in inventories at the benchmark delivery point and a cut in fuel demand that drove prices below a key technical level.

That technical move, when the 50-day moving average falls below the 200-day moving average is known as the ``death cross'' and portends a further drop in prices, technical analysts said.

Crude was also weighed down by news that the federal government issued a safety alert that crude oil being transported from the Bakken region, which stretches through swaths of North Dakota and Montana, is more flammable than traditional heavy crude.

After ending last year almost unchanged from where they started, Brent futures led losses on a range of factors, including data showing slowing economic expansion in China, the world's no. 2 oil consumer, a stronger U.S. dollar and an approaching U.S. Northeast storm that may temporarily dampen fuel demand.

Libya's National Oil Corp (NOC) said on Thursday it plans to restart the El Sharara oilfield and hopes to resume output within days after protesters agreed to suspend a strike that has blocked the field since the end of October. Libya's output is still less than 250,000 barrels per day (bpd), down from 1.4 million bpd in July.

Nestor Galina | Wikipedia

Brent crude sank by nearly 3 percent to under $108 a barrel. U.S. crude slid $2.98 to settle down at $95.44, shedding more than $4 from last week's multi-month high.

Official U.S. government data, due out two days later than usual at 11 a.m. EST (1600 GMT) on Friday due to the New Year's Day holiday, is expected to show a fifth consecutive draw in nationwide crude oil stockpiles.

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