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US oil notches razor-thin gain; Brent wobbles on supply fears

Oil fracking
David McNew | Getty Images

Brent crude oil prices fell below $100 per barrel in volatile trade on Tuesday, a fourth straight daily decline as ample supplies weighed, while U.S. crude rose on the expectation of dwindling fuel stockpiles.

Prices were not far above Monday's 16-month low as feared cuts to supply due to violence in the Middle East have failed to materialize, and production resumed at Britain's North Sea Buzzard oilfield after a series of shutdowns and failed restarts.

In the United States, expectations of another fall in crude inventories supported prices, as did news of a delayed start up of the Pony Express pipeline that will carry crude from Wyoming to Oklahoma.

Brent crude fell 75 cents to $99.45 by 1:59 p.m. EDT (1759 GMT). On Monday, prices slid below $100 for the first time in more than 14 months, hitting a low of $99.36, the weakest since May 1, 2013. Brent is down 11 percent so far this quarter, the biggest such drop since the second quarter of 2012.

U.S. crude settled up 9 cents at $92.75, snapping a three-day losing streak.

Libya's oil output has risen to 740,000 barrels per day, the National Oil Corp said on Monday, a rise from 725,000 bpd fueled by several oil export ports reopening.

The possibility of a cut in output by the Organization of the Petroleum Exporting Countries has kept a floor under oil prices. Gulf Arab oil ministers hold their annual meeting on Thursday in Kuwait that could include discussions about price levels. Top OPEC exporter Saudi Arabia and other OPEC members can accept oil at $100 per barrel although some delegates see lower prices as short-lived.

The market is now waiting for U.S. crude inventory data for clues on the outlook for demand in the world's top oil consumer.

U.S. crude oil stocks likely fell 1.5 million barrels in the week to Sept. 5, according to a preliminary Reuters analysts' survey on Monday. Distillate stockpiles likely rose 1 million barrels, while gasoline inventories fell 100,000 barrels, the poll said.

--By Reuters