Brent crude oil futures prices edged lower on Thursday, pressured by a forecast dip in demand during refinery maintenance season and a rise in jobless claims in the United States, the world's largest oil consumer.
The poor jobless data was compounded by weak U.S. retail sales data suggesting that consumers used their money toward heating fuel this year amid a record cold winter. The data pressured the U.S. stock market and weighed on oil prices.
"Any negative information coming out of the U.S. will send a demand destruction signal to the market which will cause prices to pull back temporarily," said Michael Weis, commodity analyst with energy consultancy Schneider Electric in Louisville, Kentucky.
Brent's losses were limited by a report from the International Energy Agency (IEA), which said inventories in the developed world fell 1.5 million barrels per day (bpd) in the last three months of 2013 in the steepest quarterly decline since 1999.
Both contracts slightly pared losses after a report that BP declared force majeure on Angolan Plutonio crude exports after damage to a hose, and production has been cut back. The Plutonio stream is scheduled to export 179,000 bpd in February, according to loading programs provided by trading sources.
U.S. crude edged slightly higher towards the close of the session on the back of rising heating oil prices, analysts said, before turning negative just ahead of the session's close.
Heating oil futures rose 1.8 cents, or 0.6 percent, by 2:37 p.m. EDT (1937 GMT).
"The weather is having a push-pull effect, with heating oil up and crude a little soft," said John Kilduff, a partner at Again Capital, LLC in New York.
Brent crude oil futures for March delivery, which expire on Thursday, fell by 6 cents to settle at $108.73 a barrel, after closing up 11 cents in the previous session. The April contract rose 13 cents to $108.48.
U.S. crude, also known as West Texas Intermediate (WTI), lost 2 cents to close at $100.35 barrel, having dipped as low as $99.40 a barrel earlier in the session, below the 200-day moving average of $99.51.
U.S. crude oil had traded as high as $101.38 on Wednesday, its strongest since Oct. 18, after data showed TransCanada Corp's Gulf Coast pipeline has begun to drain oil in earnest from the benchmark delivery point in Cushing, Oklahoma.
U.S. crude narrowed its gap with Brent to less than $8 on Wednesday, the smallest since early October. The spread <CL-LCO1=R> widened on Thursday to settle at $8.38 per barrel.
Oil prices may find some support from the potential for further supply interruptions from Libya, where protesters have shut gas and oil pipelines from the Wafa oilfield and blocked another line from the larger El Sharara field.
A spokesman for Libya's National Oil Corporation said production had fallen to 460,000 bpd.
Low prices also reflected traders expectations of declining crude demand. Crude oil demand traditionally dips in the second quarter of the year as large northern hemisphere refineries reduce capacity for maintenance.
The market also concerned itself with reports that a train carrying crude oil crashed in Pennsylvania, adding to a string of recent accidents.
(By Anna Louie Sussman; Additional reporting by Jeanine Prezioso in New York, Christopher Johnson and David Sheppard in London and Jacob Gronholt-Pedersen in Singapore; Editing by Jason Neely, Keiron Henderson, Marguerita Choy and Meredith Mazzilli)