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Oil prices fell today as investors anticipate a drop in demand for heating oil at the end of the winter chill.

Brent crude dropped by 17 cents to $109.34 a barrel, while US oil was down by 20 cents to $101.63, reported Reuters.

Investors are assessing demand outlook as severe chill over the US and Europe eases, and as refiners prepare to take plants down for maintenance after meeting peak winter consumption.

Brent futures were trading above $109 a barrel, drawing support from the fall in crude stockpiles at key delivery points in the US.

API‘s data showed that oil stocks at Cushing, Oklahoma, the benchmark delivery point for the US oil futures contract, dropped by 1.1 million barrels.

The Chinese yuan fell more than 1% against the US dollar due to worries of slower growth, while the stronger US dollar weighed on crude and commodities as it priced in the dollar.

But oil prices may draw support from supply outages in Africa, especially continued disruption in Libya.

Around 100 rockets were fired at a power plant in southern Libya during clashes between rival government-paid militia, knocking off the plant.

Protests at Libyan oilfields and ports have knocked oil production down to 230,000bpd from 1.4 million in summer.

"Protests at Libyan oilfields and ports have knocked oil production down to 230,000bpd from 1.4 million in summer."

Clashes in South Sudan have seen oil output fall by a third since December to approximately 170,000bpd last week.

According to API data, gasoline and distillate fuel stocks fell by 314,000 barrels and 693,000 barrels respectively.

Investors are now waiting for the US Department of Energy’s Energy Information Administration (EIA) data to assess the demand outlook for oil.


Image: RBOB gasoline prices for March fell 3-1/2 cents to settle at $2.7981 per gallon. Photo: courtesy of kongsky.

Energy