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Oil Ends Down at $108.50 on Glum Forecasts

Reuters
Tuesday, 8 Apr 2008 | 4:24 PM ET

U.S. crude oil futures closed below $109 on Tuesday, as the dollar edged up and the U.S. government issued a forecast for lower world oil demand and domestic gasoline demand.

Oil Pipeline
Oil Pipeline

U.S. light, sweet crude for May delivery fell 59 cents per barrel Tuesday, to close Nymex trade at $108.50 per barrel.

Nymex crude for May delivery fell 59 cents per barrel, or 0.5% to $108.50.

In London, May Brent crude was down 92 cents or 0.86 percent at $106.22 a barrel, trading from $105.72 to $107.78.

The dollar/yen rose and dollar/euro rose on Tuesday after U.S. stocks trimmed earlier losses, despite a report showing pending home sales fell to their lowest level on record in February.

The euro was stronger against the yen.

The U.S. Energy Information Administration said second quarter world oil demand growth versus the year-ago period will be 180,000 barrels per day less than the agency's prior forecast.

The EIA said in its summer forecast that U.S. summer gasoline prices will average $3.54 a gallon, up 61 cents from 2007, helping to reduce motor fuel demand.

Strong European gas oil prices helped push crude and heating oil futures up on Monday, with traders citing the impact of Finnish Neste Oil's recent refinery fire.

European oil products were mixed on Tuesday.

Diesel extended gains on tight supply.

Gasoline barges were lower and fuel oil weaker even as Asia hit records.

Neste said on Monday its fire-damaged diesel production line in Porvoo would undergo repairs and maintenance through May but that the fire would not have an impact on Neste's product deliveries.

Sunoco'srefinery in Marcus Hook, Pa. was still shut after a power outage on Monday.

Nymex May RBOBwas lower. The RBOB crack spread was at $7.16 from $7.82 on Monday.

May heating oilwas near flat.

The heating oil crack spread was at $21.45 versus $20.45 Monday.

Ahead of Wednesday's weekly EIA inventory report, a Reuters poll of analysts yielded a forecast for crude stocks to have risen 2.2 million barrels last week.

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