Brent oil fell by nearly $1 per barrel on Monday, pressured by sinking heating oil prices as the market looked toward the end of a long and frigid winter and as supplies increased from Libya and the North Sea.
Yet U.S. crude ended above $100 for the first time this year, as investors awaited direction from the new head of the U.S. Federal Reserve on the course of the central bank's monetary policy.
Intense and relentless cold has propped up oil prices as demand for heating fuels skyrocketed and refiners pumped out distillates. That is set to yield next week as temperatures in large cities are expected to moderate.
By afternoon, U.S. heating oil futures slipped by nearly 2 percent below $3 per gallon, pressured by weak diesel cash prices that also weighed on oil, said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania.
March Brent crude was down nearly $1 under $109 a barrel, after reaching a high of $109.75, its loftiest since Jan. 2. The contract expires at the end of trading on Thursday. Brent oil for April delivery was trading 83 cents lower at $108.02. U.S. crude ended the session up 18 cents at $100.06, after rising to $100.55, a 2014 high.
Fed chief Janet Yellen delivers her first testimony to Congress this week and markets expect her to indicate she will stay the course on tapering the Fed's bond buying program. The Fed has been cutting its bond purchases by $10 billion a month as the U.S. economy has strengthened. The bond buying program has provided support for commodity and equity markets.
March was down 50 cents near $109 a barrel, after reaching a session high of $109.75, its loftiest since Jan. 2. The March contract expires at the end of trading on Thursday. Brent oil for April delivery was trading 50 cents lower at $108.35.
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