NEW YORK (Reuters) - Oil tumbled more than 3 percent on Tuesday as a global stock market slide prompted profit-taking ahead of OPEC's meeting in Vienna and dragged prices further from a record near $104 a barrel.
U.S. light crude for April delivery fell $3.17 to $99.28 a barrel by 1916 GMT, off a record high of $103.95 hit Monday on expectations the Organization of Petroleum Exporting Countries would hold output steady on Wednesday.
London Brent crude traded down $3.07 to $97.47 a barrel.
World stock markets fell sharply on Tuesday amid renewed worries about the health of big banks after the head of major Middle Eastern sovereign wealth fund warned U.S. banking giant Citigroup needed billions of dollars in fresh capital to cope with mounting credit losses.
"The stock market is down and there is expectation that Wednesday's EIA data will show another build in crude stocks," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.
Traders expect the U.S. government's Energy Information Administration to report on Wednesday that U.S. crude oil stocks rose for the ninth consecutive week, according to a Reuters survey.
U.S. gasoline stocks, already at 14-year highs, are expected to have grown for the 17th week in a row, further cutting into bullish sentiment. Traders drove down U.S. gasoline futures more than 5 percent in response, pilling further pressure on crude oil prices.
U.S. Energy Secretary Sam Bodman repeated calls for OPEC to increase production, while President George W. Bush said the producer group would be making a "mistake" to allow high energy prices to hurt the economies of its main customers.
But OPEC appeared set to rebuff appeals for more oil as delegates at this week's meeting continued to blame the latest surge in oil prices on speculators.
"What we have seen is that market prices are not related to fundamentals but to geopolitics, refining capacity shortage and speculation in the market," said Kuwaiti Oil Minister Mohammad al-Olaim in an interview with Reuters on Tuesday.
OPEC may revisit output policy in April on the sidelines of an oil producers and consumers summit in Rome, OPEC President Chakib Khelil said.
FUNDS AND FUNDAMENTALS
Oil and other commodities have hit record highs recently amid physical supply constraints and buying by investment funds.
"Investors concerned about inflation and the outlook for the U.S. dollar have preferred to park their money in other assets, and commodities have been a principal beneficiary of this trend," said David Dugdale of MFC Global Investment Management.
But analysts at Goldman Sachs cautioned the recent rally should not be blamed entirely on speculators, noting long-term oil prices have continued to rise.
"Escalating industry costs and the need to further motivate new investment in an industry that has largely exhausted spare production capacity continue to be the main driver of oil prices," the Goldman analysts said in a research note released on Tuesday.
U.S. light crude for April delivery fell $3.17 to $99.28 a barrel by 1916 GMT, off a record high of $103.95 hit Monday on expectations the Organization of Petroleum Exporting Countries would hold output steady on Wednesday.
London Brent crude traded down $3.07 to $97.47 a barrel.
World stock markets fell sharply on Tuesday amid renewed worries about the health of big banks after the head of major Middle Eastern sovereign wealth fund warned U.S. banking giant Citigroup needed billions of dollars in fresh capital to cope with mounting credit losses.
"The stock market is down and there is expectation that Wednesday's EIA data will show another build in crude stocks," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.
Traders expect the U.S. government's Energy Information Administration to report on Wednesday that U.S. crude oil stocks rose for the ninth consecutive week, according to a Reuters survey.
U.S. gasoline stocks, already at 14-year highs, are expected to have grown for the 17th week in a row, further cutting into bullish sentiment. Traders drove down U.S. gasoline futures more than 5 percent in response, pilling further pressure on crude oil prices.
U.S. Energy Secretary Sam Bodman repeated calls for OPEC to increase production, while President George W. Bush said the producer group would be making a "mistake" to allow high energy prices to hurt the economies of its main customers.
But OPEC appeared set to rebuff appeals for more oil as delegates at this week's meeting continued to blame the latest surge in oil prices on speculators.
"What we have seen is that market prices are not related to fundamentals but to geopolitics, refining capacity shortage and speculation in the market," said Kuwaiti Oil Minister Mohammad al-Olaim in an interview with Reuters on Tuesday.
OPEC may revisit output policy in April on the sidelines of an oil producers and consumers summit in Rome, OPEC President Chakib Khelil said.
FUNDS AND FUNDAMENTALS
Oil and other commodities have hit record highs recently amid physical supply constraints and buying by investment funds.
"Investors concerned about inflation and the outlook for the U.S. dollar have preferred to park their money in other assets, and commodities have been a principal beneficiary of this trend," said David Dugdale of MFC Global Investment Management.
But analysts at Goldman Sachs cautioned the recent rally should not be blamed entirely on speculators, noting long-term oil prices have continued to rise.
"Escalating industry costs and the need to further motivate new investment in an industry that has largely exhausted spare production capacity continue to be the main driver of oil prices," the Goldman analysts said in a research note released on Tuesday.
