Connect to share and comment

Oil prices drop after poor US data

PlacardEnlarge
(Globalpost/GlobalPost)

Global oil prices fell on Monday following disappointing US housing data, traders said, reversing earlier gains won on the back of improved demand for crude in the world's biggest economy.

Brent North Sea crude for delivery in September dropped 22 cents to stand at $107.85 a barrel in late London deals compared with Friday's closing level.

New York's main contract, West Texas Intermediate (WTI) for August, slid 88 cents to $107.17 a barrel.

"US crude oil prices have slid back after this afternoon's disappointing US home sales numbers prompted some weakness after last week's moves to multi-month highs" for oil, said Michael Hewson, senior analyst at traders CMC Markets.

Sales of previously-owned US homes unexpectedly slipped in June but prices continued to rocket higher, according to a real-estate report released on Monday.

The National Association of Realtors (NAR) said home sales fell 1.2 percent to an annual rate of 5.08 million in June, from a downwardly revised 5.15 million in May.

Monday's drop in oil futures comes after WTI crude on Friday had reached 16-month highs at $109.32 a barrel -- topping the price of Brent for the first time since August 16, 2010.

Oil prices have been supported by a nearly 27-million barrel decline in US stockpiles in the past three weeks thanks to the US driving season when Americans take to the roads for their holidays.

"We are in the driving season and expect to see prices for WTI sustained at these higher levels," said Kelly Teoh, market strategist at IG Markets in Singapore.

burs-bcp/yad

http://www.globalpost.com/dispatch/news/afp/130722/oil-prices-drop-after-poor-us-data