LONDON (Reuters) -Oil slid for a third day on Wednesday but remained in a narrow trading range below $60 a barrel with little impetus to break out in either direction.
“Prices are stuck in a three-week range but capped below key resistance. We (expect) to see further downside price moves, although in the near-term, we are resigned to sideways activity,” said Barclays Capital technical analysts, who study past price moves to predict future direction.
At 1048 GMT U.S. crude was down 68 cents at $58.17. London Brent was down 57 cents at $57.41.
A rollercoaster seven months have taken oil from a record $78.40 last July to a 20-month low of $49.90 in January as big investment funds shifted positions, tensions around Middle East and Africa producers ebbed and flowed and OPEC cut its output.
With a United Nations deadline for Iran to halt uranium enrichment falling on Wednesday, few analysts or investors expect a sharp sell-off in oil.
The world’s fourth biggest oil exporter Iran remains defiant, running a risk of tougher international sanctions.
“In response to Iranian non-compliance of the U.N. Security Council’s demand, the U.S. government will likely press for United Nations sanctions and increase its political pressure on Iran,” said Edward Morse, analyst at Lehman Brothers.
Tensions are also rising violence in top African producer Nigeria ahead of April elections. Already militant attacks have shut a fifth of output.
Mild weather in top consumer the United States has cut into demand, however, and is acting as a drag on prices. U.S. heating oil demand is likely to be about two percent below normal this week, the U.S. National Weather Service said.
But gasoline demand will start to build into summer. Reuters reported on Tuesday that more than seven percent of refining capacity in northwest Europe, supplier to the main U.S. market, would be shut for maintenance in March, cutting gasoline supply.
“While the phasing out of winter continues to pressure heating oil, gasoline remains well supported and the only component of the energy complex in a positive momentum,” said Olivier Jakob, an analyst at Petromatrix.
Weekly U.S. oil stocks data are due for release on Thursday, a day later than usual due to Monday’s holiday. Jakob said he will be focusing on U.S. crude imports and gasoline production rather than heating oil.