The price of oil slipped below $103 a barrel Tuesday as traders awaited news on U.S. crude supplies, OPEC production and the Federal Reserve's monetary policy stance.
By early afternoon in Europe, benchmark crude for August delivery was down 19 cents at $102.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract slipped 8 cents to $103.14 a barrel on Monday in New York.
Last week, oil was pushed above $100 a barrel for the first time since May 2012 by worries that turmoil in Egypt could disrupt oil and gas shipments through the Suez Canal. "Although new elections and a referendum on a new constitution are to be held before the end of this year, it is questionable whether this will bring about a quick-fire solution to the disputes between supporters and opponents of the ousted President Morsi," said a report from Commerzbank in Frankfurt. "The situation remains tense in other Middle Eastern countries too, meaning that a lasting risk premium of $5-10 per barrel on the oil price is justified."
A report showing robust job growth in the U.S. in June also helped boost optimism. "Over the first six months of 2013, the U.S. economy added more new jobs as it did over any first half since 1999," said analysts at JBC Energy in Vienna. "With a growing US economy and surprisingly good economic development in Japan, it may be likely that economic growth in core European countries might also stabilize."
Later this week, the Energy Department releases its weekly report on supplies of crude oil and petroleum products, the U.S. Federal Reserve releases minutes of its recent policy meeting and OPEC issues its monthly update on the oil market.
A large decline in U.S. supplies, or signs that OPEC decreased output last month could boost prices, analysts say. Additional insight into the Fed's thinking on when it should begin winding down bond purchases that have supported the U.S. economic recovery should also influence trading.
Brent crude, which is used to set prices for oil used by many U.S. refineries, was down 25 cents at $107.18 on the ICE exchange in London. In other energy futures trading on the Nymex: — Wholesale gasoline was up 0.1 cent at $2.8847 a gallon.
— Natural gas fell 3.2 cents to $3.709 per 1,000 cubic feet. — Heating oil lost 0.65 cent to $2.9736 per gallon.