Investing.com - Crude oil futures slumped on Monday, as investors continued to unwind positions that had priced in the possibility of major supply disruptions stemming from the bloody Iraqi insurgency.
On the New York Mercantile Exchange, crude oil for delivery in August fell to a session low of $105.09 a barrel, the weakest level since June 26, before trimming losses to last trade at $105.20 during European morning hours, down 0.53%, or 55 cents.
U.S. oil futures ended down 0.09%, or 10 cents, on Friday to settle at $105.74. New York-traded oil futures were likely to find support at $105.03 a barrel, the low from June 26 and resistance at $106.81 a barrel, the high from June 26.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for August delivery dipped 0.54%, or 61 cents, to trade at $112.69 a barrel, the lowest level since June 17.
Oil prices continued their downward trend in recent sessions amid indications Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks.
Futures rallied to nine-month highs earlier in the month amid fears that an insurgency in northern Iraq would spread to the oil-rich south and disrupt the nation's oil production.
Iraq produced approximately 3 million barrels a day of oil last month, making it OPEC’s second-biggest oil producer behind Saudi Arabia.
Meanwhile, market players looked ahead to key risk events later in the week.
China is due to release its official manufacturing purchasing manager's index for June on Tuesday, which many are predicting could hit a six-month high.
Investors were also turning their attention to the U.S. nonfarm payrolls report for June, due to be released one day early on Thursday, for further indications on the strength of the labor market.
Analysts expect the U.S. economy to have added 210,000 jobs this month while the jobless rate is seen steady at 6.3%.
A European Central Bank policy meeting on Thursday will also be in focus.