(Updates with settlement prices, adds poll of analysts ahead of
U.S. inventory data in last paragraph)
By Matthew Robinson
NEW YORK, Jan 7 (Reuters) - Oil tumbled nearly 3 percent on
Monday as warm U.S. weather and threats of a recession in the top
energy consumer dragged prices further from the $100 record struck
last week.
The drop came despite rising tensions between Tehran and
Washington after five Iranian boats made aggressive maneuvers
against three U.S. Navy ships in the Strait of Hormuz, a major oil
shipping route. []
U.S. oil <CLc1> settled down $2.82 to $95.09 a barrel,
extending losses from the previous session's $1.27 decline. London
Brent crude <LCOc1> settled $2.40 lower at $94.39.
"Crude is down, with heating oil leading the market lower, due
to warmer temperatures," said Tom Knight, trader for Truman
Arnold.
Forecasts for warm temperatures in the U.S. Northeast, the
nation's biggest heating oil market, should depress demand for the
fuel to 40 percent below normal levels, the National Weather
Service forecast.
U.S crude hit a session high of $98.40 a barrel following news
of the tensions between the United States and Iran -- already at
odds over a range of issues from Iran's nuclear program to U.S.
allegations of Iranian support for terrorism -- at the weekend.
The Pentagon said the incident was serious and described the
Iranian actions as "careless, reckless and potentially hostile"
and said Tehran should provide an explanation. The Iranian foreign
ministry described the incident as ordinary.
OFF PEAKS
Oil has pulled back from the record peak of $100.09 a barrel,
hit last Thursday on concerns over tight U.S. crude stockpiles.
The retreat began after a U.S. report last week showed the
nation's unemployment rate rose to 5 percent in December, its
highest in more than two years.
A weak economy has darkened the outlook for energy demand.
"Concerns about the U.S. economy are clearly putting some
pressure on oil prices. Some market players are also using this
opportunity to take profits," said Gerard Burg, a resource analyst
from the National Bank of Australia.
Oil's move into triple figures also has increased expectations
producer group OPEC would hike output when it meets on Feb. 1 in
Vienna.
Saudi Oil Minister Ali al-Naimi said on Sunday that the rise
in oil prices had been determined by market forces, but declined
further comment on what action the cartel would take at the
meeting.
OPEC president Chakib Khelil said on Saturday he expected oil
prices to keep rising during the first quarter of this year before
stabilizing in the following quarter.
Venezuela's energy minster on Monday said current prices were
fair to producers and that there was no need to hike output.
[]
Goldman Sachs, the most active investment bank in energy
markets, forecast oil would average $95 a barrel in 2008.
"We maintain that the combination of tighter short-term
fundamentals and escalating costs will continue to provide strong
support to oil prices in 2008, with the risk skewed to the upside
from current levels," Goldman Sachs said.
A Reuters poll of analysts forecast weekly U.S. inventory
data to be released on Wednesday will show a 900,000 barrel draw
in crude stocks, a 300,000 barrel gain in distillate supplies, and
a 2.1 million barrel gasoline build.
(Additional reporting by Fayen Wong in Sydney, Santosh Menon and
Randy Fabi in London; Editing by David Gregorio)
