Crude Falls on Strong Dollar, Pares Recent Gains

U.S. crude futures fell on Monday after three days of gains as the dollar hovered near a three-week high, while news that China's implied oil demand hit a record high last month failed to support prices.

FUNDAMENTALS

U.S. light, sweet crude for April delivery [CLCV1 Loading... () ] was down 45 cents at $106.95 a barrel by 0037 GMT, after settling up 82 cents at $107.40 on Friday. Last week, the contract rose 70 cents.

London Brent crude for April delivery [LCOCV1 Loading... () ] was down 32 cents at $125.66 a barrel, after settling up $0.54 on Friday. Last week, the contract rose $2.33.

China's implied oil demand rose about 2 percent in February year-on-year to 9.71 million barrels per day (bpd), back to a record high seen in December after a brief dip in January, Reuters calculations based on preliminary government data showed on Saturday.

China imported a record 5.95 million barrels per day of crude oil in February, 18.5 percent higher than a year earlier, data from China's General Administration of Customs showed on Saturday.

China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand or seasonal distortion drove the drop.

Import growth of 39.6 percent on the year in February was the strongest in a year, well ahead of the 27 percent expected and more than twice the rate of export growth of 18.4 percent that was barely more than half the pace forecast — albeit at a six month high.

Top oil producer Saudi Arabia supplied 9.4 million barrels per day (bpd) of crude to the market in February steady from January, an industry source familiar with the matter told

Reuters on Saturday.

"Production from the kingdom was in the range of 9.85 million bpd also steady from the previous month," the industry source added.

MARKETS NEWS

For a moment, U.S. stocks looked like they were headed for a long-awaited pullback last week. But that didn't happen.

After the latest signs of a healthier economy, stocks may have more room to rally in the week ahead.

The dollar hovered around three-week highs against a basket of major currencies in Asia on Monday, having gained ground late last week after upbeat U.S. jobs data was seen lessening the chance of fresh stimulus from the Federal Reserve this week.