(Updates prices, adds comment)
By Santosh Menon
LONDON, April 1 (Reuters) - Oil fell toward $100 on Tuesday,
extending losses from the previous session as a strengthening
U.S. dollar triggered a wide sell-off across commodity markets.
U.S. crude <CLc1> dropped $1.55 to $100.03 a barrel by 1435
GMT after briefly dipping below $100, following Monday's $4.04
decline on end-of-quarter selling by funds locking in their
profits in commodities to offset losses in other asset classes.
London Brent <LCOc1> fell 99 cents to $99.31 a barrel.
Gas oil futures <LCOc1> were especially weak, dropping
nearly 5 percent to $921 a tonne as the heating oil season draws
to a close.
Average oil futures prices surged to record highs during the
first quarter of 2008, with the average for U.S. crude up 68
percent on a year-earlier and 8 percent higher than the
preceding quarter.
Funds sold out of oil positions in droves on Monday to take
profits at the end of the first quarter, as a week of heavy
fighting in Iraq's oil port city of Basra ended and officials
forecast a recovery in crude exports from the hub within a day.
"We look for the U.S. dollar to generally guide pricing
today now that military activity in Southern Iraq has subsided
and most financial markets are showing some stability," said Jim
Ritterbusch, president of Ritterbusch & Associates in Illinois.
"But with the start of a new quarter, funds will likely be
viewing further price pullbacks as buying opportunities,
especially after freeing up a significant amount of cash via
recent commodity liquidation," he added.
Gold, silver and platinum prices tumbled on Tuesday on broad
gains in the dollar on better-than-expected manufacturing data
out of the United States and after a report showed U.S. chain
store sales rose last week.
The dollar was also helped by Swiss bank UBS and Germany's
Deutsche Bank announcement of $23 billion in additional
writedowns, which showed that credit problems are not limited to
the United States.
Analysts said the market was awaiting data on weekly U.S.
oil inventories, due out on Wednesday and expected to shed more
light on the prospects of oil demand in the world's top fuel
consumer, which, some say, is in the grip of a recession.
"People are looking at U.S. gasoline demand and how stocks
can be accumulated before the summer driving season. It depends
on the U.S. economy," said Tetsu Emori, a Tokyo-based fund
manager at Astmax Co Ltd.
Gasoline inventories in the United States are forecast to
have fallen by 2.3 million barrels last week, the third straight
week of decline, a Reuters poll found. []
Distillate stocks, which include heating oil and diesel,
were likely to drop 1.5 million barrels, but crude oil stocks
are forecast to rise 2.3 million barrels due to higher imports.
(Additional reporting by Felicia Loo in Singapore and Gene
Ramos in New York; Editing by James Jukwey)
