NEW YORK--Oil futures slid to a one-month low Tuesday on expectations of rising U.S. supplies amid reduced demand as refineries undergo seasonal maintenance.
Light, sweet crude for April delivery settled down $1.09, or 1.1%, at $100.03 a barrel on the New York Mercantile Exchange, the lowest settlement price since Feb. 11. Brent crude on the ICE futures exchange settled up 47 cents, or 0.4%, at $108.55 a barrel.
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U.S. prices briefly slipped below $100 a barrel for the first time since Feb. 14.
Futures have rallied in recent weeks on signs that a storage bottleneck in Cushing, Okla., where the benchmark futures contract is priced, is shrinking.
A storage glut has built up in Cushing in recent years as U.S. oil production rapidly increased without sufficient transportation channels to connect the crude to existing refineries. The bottleneck kept U.S. prices below that of Brent crude oil, the international benchmark, in recent years. Storage levels at Cushing have fallen for five straight weeks, thanks to a new pipeline connecting Cushing to the Gulf Coast.
However, the supplies being transported out of Cushing aren't being matched by refinery demand. Refinery utilization rates typically fall in February and March as refiners close units for seasonal maintenance.
Despite falling storage levels in Cushing, overall U.S. crude-oil supplies have risen for seven straight weeks.
"There's a realization that this is something of a moveable feast here, in terms of the barrels shifting out of Cushing down to the Gulf," said John Kilduff, founding partner of Again Capital in New York.
The U.S. Energy Information Administration is set to release storage data for the week ended March 7 on Wednesday at 10:30 a.m. EDT. Analysts are expecting the agency to report a two million-barrel rise in crude-oil supplies.
Speculators such as hedge funds pushed their bullish bets on crude-oil prices to an all-time high last week, according to data from the U.S. Commodity Futures Trading Commission. Investors are now closing out those positions, Mr. Kilduff said.
"The trade really just got one-sided," he said.
Analysts also expect the EIA to report that gasoline supplies fell 1.6 million barrels, while stocks of distillates, including heating oil and diesel fuel, fell 400,000 barrels.
The American Petroleum Institute, a trade group, is scheduled to release its own data for the same week later Tuesday.
Front-month April reformulated gasoline blendstock, or RBOB, settled up 1.76 cents, or 0.6%, at $2.9670 a gallon. April diesel settled down 0.64 cent, or 0.2%, at $2.9610 a gallon, its lowest price since Jan. 14.
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