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Oil falls to near $101 ahead of US supply reports

Oil falls to near $101 ahead of US supply reports

May 10th, 2011 by EILEEN NG, Associated Press in News

KUALA LUMPUR, Malaysia (AP) - Oil prices fell to near $101 a barrel Tuesday in Asia as traders anticipated a further rise in weekly U.S. crude inventories in a sign of weakening demand.

Benchmark crude for June delivery was down $1.41 to $101.14 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract rose $5.37, or 5.5 percent, to settle at $102.55 on Monday.

In London, Brent crude for June delivery was down $1.04 to $114.86 a barrel on the ICE Futures exchange.

Oil rose Monday after a steep 15 percent fall last week but traders took profits Tuesday ahead of weekly U.S. energy data and after US exchange operator CME Group said it is raising the margin requirements for trade in a wide range of oil products.

Crude inventories likely rose 1.6 million barrels last week, continuing an uptrend since early January, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

The American Petroleum Institute is scheduled to announce its inventory numbers later Tuesday while the Energy Department's Energy Information Administration reports its weekly supply data Wednesday.

"Crude supplies are expected to show a small build due largely to a continued strong import pace that should more than offset increased demand from the refinery system," said oil analyst Jim Ritterbusch in a report.

Other analysts expect oil prices to continue gaining due to renewed strength in stock markets, continued strong Chinese demand and OPEC output restraint. Ritterbusch and Associates said dramatic oil price swings are likely to continue this month, pegging it at a low of $92 and fresh high above $115 a barrel.

In other Nymex trading in June contracts, heating oil shed 2 cents to $2.94 a gallon and natural gas futures were up 2 cents at $4.24 per 1,000 cubic feet.