* German, French data shows faster economic contraction
* North Sea Buzzard field shut down limits oil losses
* Coming up: API oil data 4:30 p.m. EDT Tuesday
(Recasts, updates prices, market activity)
By Robert Gibbons
NEW YORK, April 23 (Reuters) – Oil edged lower on Monday on
pressure from revived concerns about a euro zone economic slump
and political uncertainty, while a North Sea production problem
and worries about Iran and potential supply disruptions limited
losses.
Euro zone business contraction deepened at a faster pace
than expected in April, with the Purchasing Managers Index for
the bloc’s dominant service sector falling to a five-month low,
against forecasts that it rose.
Politics added to the uncertainty after the Socialist
challenger edged out French President Nicolas Sarkozy, leaving
the two to fight a May 6 election run-off, and the Dutch
government was set to resign in a crisis over budget cuts.
The signs of euro-zone economic and political turmoil
sparked a “risk-off” trade, pushing global equities, the euro
and key industrial feedstock copper lower and sending investors
in the direction of perceived safe-haven assets such as the
dollar and U.S. Treasuries.
Production stopped at the North Sea Buzzard oil field,
Britain’s largest, following a problem with a gas compressor on
the field’s newest platform over the weekend.
Production is expected to “ramp up” over the next 24-48
hours according to a spokeswoman for operator Nexen.
“The North Sea Buzzard news helped pull Brent off its lows
and probably kept it from dropping as much as U.S. crude,” said
Dominick Chirichella, senior partner at the Energy Management
Institute in New York.
Brent June crude slipped 5 cents to settle at
$118.71 a barrel, having fallen to $117.21 intraday but finding
support ahead of a test of 100-day-moving-average support at
$116.55.
Front-month Brent has not been below the 100-day moving
average since late January.
U.S. June crude fell 77 cents to settle at $103.11 a
barrel, after falling below the 100-day moving average of
$102.02 to an intraday low of $101.82.
That was the U.S. June contract’s debut as the front month
after the May contract expired on Friday.
“June’s moving into the front month so it is testing support
again around the 100-day moving average,” said Chris Dillman,
analyst at Tradition Energy.
Crude trading volumes remained light, assisting price
movement, with Brent outpacing U.S. volumes. That was no
surprise as the market moved primarily on news from Europe, but
turnover for both contracts stayed below 30-day averages.
U.S. gasoline futures managed a gain, after slumping
20 cents last week and with the front-month May contract still
on the board until its April 30 expiration.
Oil markets continued to be buffeted by competing concerns
about slowing economic growth and potential for supply
disruptions after U.S. and European sanctions on Iran aimed at
curbing its nuclear program by limiting oil exports and revenues
helped lift crude prices sharply in the first quarter.
The gloomy economic news from Europe arrived a day before a
two-day U.S. Federal Reserve policy meeting, with the central
bank expected to steer clear of further bond purchases even
after disappointing U.S. jobs growth in March.
IRAN AND SANCTIONS
Iran’s foreign minister said Tehran is optimistic that a
next round of talks in Baghdad in May will make progress toward
resolving the dispute with the West over the Iranian nuclear
program.
But as sanctions curb crude exports, Iran has been forced to
deploy more than half its fleet of supertankers to store oil at
anchorage in the Gulf, according to Iran-based shipping sources.
China halved its Iranian crude imports and South Korea’s
imports fell 40 percent in March compared with the year-earlier
period, further signs of Iran’s problems placing crude into
Asia, traditionally its primary region for crude oil exports.
(Additional reporting by Peg Mackey in London and Luke
Pachymuthu in Singapore; Editing by Marguerita Choy and Dale
Hudson)
