U.S. crude oil futures ended a choppy session down slightly on Monday, paring early losses while gasoline and heating oil futures ended sharply lower.
"Profit taking on the crack spread," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA, commenting on weak products futures.
The RBOB crack spread dropped to $25.25 from a session high of $28.39. It was down from $27.92 at Friday's close.
Crude oil futures were pressured Monday by OPEC comments on supply and demand and by news that Shell expects to resume its Nigeria Forcados output in late May or early June.
Crude bounced after falling more than a dollar in morning trading. Concern over slumping gasoline inventories, refinery snags and election turmoil in OPEC-member Nigeria had pushed prices up in electronic trading.
NYMEX crude futures received an afternoon bounce from news that Enbridge
Royal Dutch Shell
Shell said force majeure was still in place for Forcados shipments and declined comment on a restart.
OPEC on Monday dismissed calls to pump more crude, saying supply was enough and that 2007 demand for its oil would be less than previously forecast.
In its April monthly oil market report, OPEC cut the 2007 forecast for demand for its oil by 120,000 bpd.
OPEC President Mohammed al-Hamli said Monday that global oil markets were well-supplied but that OPEC was ready to lift output if needed.
OPEC agreed to keep output steady at its last policy meeting a month ago, maintaining output cuts totaling 1.7 million bpd agreed to at earlier meetings.
Oil refineries along the rain-soaked U.S. Northeast coast and tanker and barge traffic associated with the New York Harbor appeared to be operating normally on Monday despite heavy rainfall in the region.
A ruling by Nigeria's Supreme Court on Monday raised uncertainty about the weekend's controversial state elections and opened the way for a late presidential bid by Vice President Atiku Abubakar. The presidential poll is on April 21.
Traders will eye this week's batch of inventory data due out Wednesday after U.S. gasoline stocks fell 5.5 million barrels in the week to April 6, according to the U.S. Energy Information Administration. Inventories have fallen more than 12% since early February.
Gasoline stocks last week were expected to have fallen for the 10th consecutive week on increased demand, a Reuters poll of industry analysts on Monday showed.
Gasoline supply was expected to be down 2 million barrels in the week to April 6, according to the average of the analyst views surveyed.
Crude oil and distillate inventories were both expected to be up 1.0 million barrels. Refinery runs were forecast to be up 0.3 percentage point, to 88.7% of capacity.