* Brent, U.S. crude both correct lower from four-month highs
* Selling comes after more than three weeks of gains
* Supply worries ease slightly on Iran news
(Updates with settlement prices)
By Gabriel Debenedetti
NEW YORK, Feb 4 Oil future prices dropped
alongside equities on Monday as traders took profits after three
weeks of gains and after a rise of about 10 percent rise in oil
prices since the beginning of December.
The selling came across markets as the S&P 500 and
other major stock indexes traded lower.
Analysts said Iran's offer of fresh talks with the West over
its nuclear program also depressed the market.
"The stronger dollar put some pressure on, and over the
weekend the geopolitical risk may have gone down a bit, at least
the rhetoric," said Phil Flynn, analyst at Price Futures Group
U.S. crude oil futures remain under pressure due to
operating restrictions on the Seaway pipeline in Texas, which
traders fear will keep a glut of oil near the delivery point for
West Texas Intermediate futures from draining.
Brent fell to a low of $115.32 per barrel before
recovering slightly to settle at $115.60. Brent had risen for
three straight weeks.
U.S. crude dropped $1.70 to a low of $96.07 per
barrel, after rising for eight consecutive weeks, the longest
such winning streak since July-August 2004. It settled at
The global economic picture brightened last week as U.S.
nonfarm payrolls rose by 157,000 in January, while the Institute
for Supply Management said its index of national factory
activity reached its highest level since April.
Other purchasing manager surveys showed Chinese factories
remaining on track for a mild recovery, while the euro zone
manufacturing sector had its best month in a year despite a
Still, U.S. Commerce Department data on Monday showed a drop
in U.S. business investment plans in December.
"A downward correction in the S&P 500 following factory data
that was weaker than expected, and a firmer U.S. dollar prompted
some profit-taking in global crude oil contracts," Timothy
Evans, energy analyst at Citi Futures Perspective, wrote in a
note to clients.
Evans went on to say that a steady performance by heating
oil futures early in the U.S. trading session suggested more of
a high level rotation between markets than a full downward
Meanwhile, supply concerns due to conflict in the Middle
East eased with the Iranian announcement.
Facing stiff sanctions from the United States and Europe
over its nuclear program, Iran said on Sunday it was open to a
U.S. offer of direct talks and that six world powers had
suggested a new round of nuclear negotiations this month, but it
did not commit itself to either proposal.
However, tensions remained high on Monday as Iran told
Israel it would regret its air strike against Syria last week,
without spelling out whether Iran or its ally planned any
(Additional reporting by Robert Gibbons in New York,
Christopher Johnson in London and Ramya Venugopal in Singapore;
Editing by Alden Bentley; and Peter Galloway)