SINGAPORE: Brent crude slipped towards US$108 a barrel on Thursday, falling for the first time in three sessions on worries of a drop in consumption as refineries enter the maintenance season.
Losses were limited as data showed record crude imports by China in January, and major forecasters US Energy Information Administration (EIA) and the OPEC raised their expectations for oil demand growth this year.
Brent crude for March delivery, which expires on Thursday, was down 54 cents at US$108.25 a barrel at 0817 GMT, after closing up 11 cents in the previous session.
The more actively traded Brent contract for April delivery was down 53 cents at US$107.82 per barrel.
US crude was 69 cents lower at US$99.68 per barrel, more than US$1.50 away from an almost 4-month high above US$101 hit in the previous session.
"The cold weather in the United States, Asia and even Europe has boosted momentum recently, but I don't think prices can hold up once temperatures rise," Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo said.
"This may be the beginning of a downward correction like the one we saw at the end of December and beginning of January when prices tanked," he said.
US oil traded as high as US$101.38 on Wednesday, the loftiest since October 18, after data showed TransCanada Corp's Gulf Coast pipeline began in earnest to drain oil from benchmark delivery point Cushing, Oklahoma.
Stocks at the delivery point fell by 2.7 million barrels last week, EIA data showed. Bottlenecks at the oil hub have depressed prices for the last three years.
The support for WTI narrowed its gap with Brent to less than $8 on Wednesday, the smallest since early October. The spread widened on Thursday to US$8.57 a barrel.
"A further draining of crude stocks at Cushing is assumed by many but we retain a far more cautious view for the next few months, given imminent increases in Lower 48 crude oil production and seasonal refinery maintenance in March and April," Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said in a note.
"In addition, the new pipeline may be seen to be merely moving the surplus from the Midwest to the Gulf Coast, given the inability to export crude volumes."
Total US oil stocks climbed by a more-than-expected 3.3 million barrels in the week to February 7, while distillate stocks fell by a less-than-expected 731,000 barrels, the data showed.
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 are threatening to block another line from the larger El Sharara field.
Russia, the world's largest oil producer, expects its output to reach 525 million tonnes or 10.54 million bpd this year, a post-Soviet record high, the country's Deputy Energy Minister said on Wednesday.-- Reuters
