Investing.com - Crude futures fell on Tuesday after investors priced in gains stemming from supply disruption fears in war-torn Iraq and sold the commodity for profits, especially considering that active oilfields remain far south from the insurgency.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in August traded at $105.85 a barrel during U.S. trading, down 0.42%. New York-traded oil futures hit a session low of $105.47 a barrel and a high of $106.67 a barrel.
The August contract settled up 0.12% at $106.30 a barrel on Monday.
Nymex oil futures were likely to find support at $105.47 a barrel, the session low, and resistance at $106.84 a barrel, Friday's high.
An insurgency led by radical Sunni radicals continued to press towards Baghdad, which kept prices elevated though profit taking lowered the commodity, as investors felt geopolitical concerns had sent prices climbing too high, especially considering that oilfields in the southern reaches of the country continue to operate normally.
Many investors jumped to the sidelines to await the release of public and private-sector U.S. invntory reports.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 0.3 million barrels in the week ended June 13.
Investors also looked ahead to the outcome of the upcoming Federal Reserve policy meeting on Wednesday, as they await fresh indications on the timing of possible interest rates increases.
Mixed data kept investors on the sidelines as well, especially soft housing-sector indicators.
The Commerce Department reported that housing starts dropped by 6.5% last month to 1.001 million units, while the number of building permits issued last month fell by 6.4% to 991,000 units, both figures disappointing investors, though upbeat inflation data cushioned oil's losses.
The Labor Department reported earlier that the U.S. consumer price index rose 2.1% on year in May and rose 0.4% from April. It was the fastest increase in annual inflation since October 2008, which sparked demand for the greenback.
Market expectations had been for an annual increase of 2.0% and a monthly rise of 0.2%.
Elsewhere, on the ICE Futures Exchange in London, Brent crude oil futures for August delivery were up 0.52% and trading at US$113.53 a barrel, while the spread between Brent and U.S. crude contracts stood at US$7.68 a barrel.