The price of oil retreated to near $99 a barrel on Wednesday, adding to a big fall the day before, as traders awaited a report on U.S. crude stockpiles and considered the possible reopening of export terminals in Libya.
By early afternoon in Europe, benchmark U.S. crude for May delivery was down 66 cents to $99.08 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the Nymex contract slid $1.84.
Brent crude, used to set prices for international varieties of oil, was down $1.34 to $104.28 a barrel on the ICE exchange in London.
Despite recent signs of weakening manufacturing in China, which could dent oil demand, there are new signs of life in the U.S. economy, including a report from the U.S. Commerce Department this week showing rising construction spending.
But U.S. crude oil inventories due later Wednesday from the Energy Department are expected to show demand is still relatively muted.
Data for the week ended March 28 is forecast to show an increase of 1.8 million barrels in crude oil stocks and a draw of 2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
Crude stocks have risen 10 weeks in a row, adding over 32 million barrels between mid-January and March 21.
Meanwhile, the possible reopening of oil export facilities occupied by militias in eastern Libya, until recently an important supplier to European refineries, also weighed on prices, though analysts continued to be cautious.
"The ports in question have a daily export capacity of 600,000 barrels, which would increase Libya's oil shipments six-fold in one fell swoop," said analysts at Commerzbank in Frankfurt in a note to clients. They cautioned, however, that similar reports in the past had shown that "any agreement that is reached can in a matter of days turn out to be worth less than the paper it is written on."
In other energy futures trading in New York:
— Wholesale gasoline fell 3.51 cents to $2.8346 a gallon.
— Natural gas lost 0.6 cent to $4.27 per 1,000 cubic feet.
— Heating oil shed 2.64 cent to $2.8614 a gallon.