Iraq Probable Recovery Drags Oil Down To $101

Oil fell toward $101 a barrel on Tuesday, continuing experiencing substantial losses a day earlier started by an expected recovery in Iraqi crude exports, but a foresee of lower U.S. gasoline stocks limited the drop.

U.S. crude dropped to $101.07 a barrel, down 51 cents by 0721 GMT (8:21 a.m. BST), continuing setting back to $4.04 a barrel on Monday, while London Brent crude fell by 8 cents to $100.22 a barrel.

Prices plunged as a week of heavy fighting in Iraq's oil port city of Basra ended and officials forecasted a recovery in crude exports from the hub within a day.

Distillate stocks, which include heating oil and diesel, were likely to drop 1.5 million barrels but crude oil stocks are projected to rise 2.3 million barrels due to higher imports.

Iraqi officials said operations on a pipeline feeding Basra's export terminal would recover by Tuesday, after a bomb attack during an Iraqi military crackdown on Shi'ite militants in the area cut exports by about 100,000 bpd.