NEW YORK (Dow Jones)--Crude oil futures ended lower Monday as the market failed for the third straight day to sustain a rally above the psychologically important $80-a-barrel level.
Light, sweet crude oil for April delivery on the New York Mercantile Exchange settled 96 cents, or 1.2%, lower at $78.70 a barrel after several attempts to crack through an intraday high of $80.62 a barrel, the highest level since Jan. 12, fizzled. April North Sea Brent crude oil on the ICE settled 70 cents lower, at $76.89 a barrel.
"We've been between $70 and $84 for the last couple of months. The longer you stay in a range, you'll see faster moves within the ranging. But really nothing has changed," said Gene McGillian, an analyst with Tradition Energy in Stamford, Conn.
"If we come in [Tuesday] and see a further equities rally and maybe a little weakness in the dollar, the market could be right back up at $80," he said, but added that strong signs of higher oil demand will be needed to break the collar around prices.
He noted that April gasoline futures, trading for the first day as the front-month contract, came under heavy selling pressure after trading to the highest intraday front-month price since Oct. 6, 2008. "People saw gasoline above $2.20 and that looked pricey," he said, adding that heavy selling in the contract helped pulled down crude.
Traders said the market will focus on upcoming U.S. oil inventory data for near-term direction. The American Petroleum Institute's data for the week ended Feb. 26 are due Tuesday afternoon, while the more widely tracked figures from the government's Energy Information Administration are scheduled for release at 10:30 a.m. EST Wednesday.
Analysts surveyed by Dow Jones Newswires expect crude oil stocks to rise by a mean of 700,000 barrels, with forecasts ranging from a rise of 2.25 million barrels to a drop of 1.6 million barrels. Distillate stocks (diesel and heating oil) are expected to drop by 300,000 barrels, with a range of expectations from a rise of 1.8 million barrels to a drop of 1.75 million barrels. Gasoline stocks are expected to rise by 600,000 barrels, with projections spanning from a gain of 2 million barrels to a decline of 750,000 barrels.
Ahead of its March 17 meeting on oil production policy, the Organization of Petroleum Exporting Countries continues to pump more oil and show lower compliance with output restraints. Production from the 11 members of OPEC bound by output restraints crept up by 110,000 barrels a day in February to 26.895 million barrels a day, a Dow Jones Newswires survey showed.
That puts the group's compliance with targeted cuts that began in late 2008 at just 51%, down from 54% in January and 82% in March 2009. Oil prices have averaged near $77.50 a barrel, within OPEC's comfort zone, since the group agreed in December to keep formal output restraints in place. Members haven't given any signs that they plan to change policy at the upcoming Vienna talks.
April reformulated gasoline blendstock futures shed 3.23 cents, or 1.5%, to settle at $2.1556 a gallon. April heating oil settled 1.18 cents, or 0.6%, lower at $2.0235 a gallon.
More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
-By David Bird, Dow Jones Newswires; 212-416-2141; firstname.lastname@example.org