LONDON – Oil fell more than a dollar to below $59 a barrel Monday, pressured by warming weather in the United States and expectations OPEC will not reduce production when it meets this week in Vienna.
U.S. crude settled down $1.14, or 1.9 percent, at $58.91 a barrel. London Brent crude fell 39 cents at $60.74.
Milder weather in the United States, the world's top energy consumer, was ushering in an end to heating oil demand season, taking some pressure off of falling fuel stockpiles.
The nation's oil refiners, many of which have overhauled processing units in recent months, are preparing to boost production of gasoline leading into spring.
Producer group OPEC, meanwhile, was expected to hold output policy unchanged after agreeing to two previous cuts since last autumn, amounting to 1.7 million barrels per day.
"From the physical point of view, the market seems to be pretty well balanced, which means there is no need for OPEC to reduce supply," said Frederic Lasserre, head of commodities research at Societe Generale.
Comments from OPEC members have reinforced the expectation that the organization will not change output.
"They should do nothing if the price remains as it is," Qatari Oil Minister Abdullah al-Attiyah told reporters in Dubai Monday.
Oil prices climbed above $62 last week, towards the top of the market's recent range, propelled in part by a fall in U.S. gasoline stocks over the past five weeks — the deepest stock decline on record for the time of year.
But supply concerns proved temporary, spurring investors to take profits on Friday.
The market's failure to break above recent highs last week was viewed as a negative signal by traders who use the past performance of prices to help forecast future market direction.
Prices have climbed from a 20-month low of $49.90 reached on Jan. 18, but the market is down from an all-time peak of $78.40 hit in July 2006.
Political tensions over Iran's nuclear programme are still a supportive influence for the market.
Iran said on Sunday President Mahmoud Ahmadinejad wanted to brief the U.N. Security Council about its civilian nuclear plans, which the West says are a covert attempt to make atom bombs.
The five permanent members of the council — the United States, France, Britain, China and Russia — plus Germany, are considering imposing new sanctions on Iran over its nuclear ambitions.