U.S. oil fell by more than $1 per barrel on Monday, pressured by an unexpected fall in China's exports that stoked fears of a slowdown in the world's second largest economy.
Moderating temperatures that will cut the need for heating fuels also weighed on U.S. oil prices. U.S. ultra low-sulfur diesel futures, more commonly known as heating oil, were down 1.5 percent.
Oil on both sides of the Atlantic was pressured as traders unwound some of the risk premium associated with fears of an escalation in tensions in Crimea over the weekend. The crisis in Ukraine had pushed money managers to collect a record number of bullish bets in U.S. oil futures and options last week, U.S. government data showed on Friday.
After two straight days of gains, Brent crude was trading 50 lower near $108. U.S oil fell $1.46 to settle at $101.12 per barrel, after touching a session high at $102.82.
U.S. oil's discount to the global benchmark has narrowed by as much as $9 since the beginning of the year as TransCanada's Gulf Coast pipeline has funneled oil from Cushing to the Gulf Coast.
With heating season coming to an end and refiners in maintenance season, traders and analysts expect that oil leaving Cushing will simply pool along the coast, forcing a temporary a glut and capping prices until stocks are drawn down to make gasoline for summer driving season. Oil stocks in the Gulf Coast have risen every week over the last 1.5 months.
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