Oil reaches a 2-week low close to $111 (Reuters) (14-03-2011)

SINGAPORE – Brent crude fell to a 2-week low on Monday as investors expect that economic growth will slow after Japan’s earthquake and tsunami, while easing unrest in the Middle East brought ample oil supplies into interest.

April Brent fell as much as 2.4 percent to $111.16, the lowest price since February 25.

It was down $1.64 at $112.20 at 0750 GMT while U.S. crude fell $2.15 to $99.01, after hitting an intraday low of $98.55. Brent reached a 2-1/2-year high of almost $120 on February 24 as a civil war erupted in Libya, disrupting oil exports.

Expectations of higher demand for LNG, crude and fuel oil to substitute 9,700 megawatts of nuclear power capacity lost after the 8.9-magnitude quake are helping boost the value of Brent later this year relative to the prompt prices. U.S. natural gas rose almost 1 percent.

Japanese stocks fell 7.5 percent, showing the biggest daily decline since October 2008, and bond yields rose on Monday as investors expected the earthquake and tsunami that devastated the country's northeast to take an economic toll and require heavy government borrowing.

According to chairman of Asia's leading oil producer PetroChina, oil is estimated to fall in the short term and may rebound in one or two months.

Speculators' net-long positions in U.S. crude futures rose by 2 percent to hit a new record high in the week to March 8, the Commodity Futures Trading Commission announced on Friday, the third consecutive peak.

Source: Reuters