Oil Eases on Weaker Economic Outlook
Oil slipped on lingering concerns over the health of the global economy and expectations for a drawdown in U.S. gasoline stocks.
U.S. crude for May delivery, the most actively traded contract, settled 45 cents lower at $59.25, with the expiring April contract up 14 cents to $56.73.
Oil prices have come under pressure from fears a world economic slowdown could be sparked by troubles in the U.S. housing sector and China's move to raise interest rates in an attempt to cool growth.
"Concerns over global growth have proved the key price-setting influence of recent, undermining prices despite evidence of a tightening market," Barclays Capital said in a research note.
Prices have recovered from a six-week low of $56.17 a barrel for U.S. crude hit on Friday, and analysts said some support had come from declining gasoline supplies in top consumer the United States.
"This is a gasoline-led market right now and people are waiting to see what the inventories are going to be tomorrow," said Chip Hodge of John Hancock Financial Services.
Weekly U.S. government oil inventory data will be released on Wednesday. Stocks of motor fuel have dropped about 6% since early February and were expected to decline further as maintenance and mechanical troubles cut refinery production by almost 15%.
"The market is obviously concerned about the inventory data, which is expected to show a sharp fall in gasoline," said James Kim, analyst at Woori Investment and Securities.
In a Reuters poll, industry analysts expected the U.S. data to show a 1.7 million-barrel drop in gasoline inventories, the sixth consecutive weekly draw.
Distillate stocks were also expected to decline by 1.3 million barrels. Crude oil inventories were seen rising by 800,000 barrels on higher imports.
Last week the Organization of the Petroleum Exporting Countries decided to maintain current production levels and keep close watch on world oil markets and the economy.
U.S. Energy Secretary Sam Bodman said he was "not uncomfortable" with OPEC's decision.
But Libya's top oil official told Reuters that OPEC would hold talks if prices dropped.