The price of oil slipped closer to $103 a barrel Tuesday as concerns about supply disruptions continued to fade.
Benchmark West Texas Intermediate crude for August delivery fell 13 cents to close at US$103.40 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.30 to close at US$108.94 on the ICE Futures exchange in London.
Oil has been falling steadily since it hit a 10-month closing high of $107.26 on June 20 as a string of victories by Iraqi insurgents that raises fears for Iraqi oil exports. However, those fears have since receded as the Iraqi government has since blunted their advance. Meanwhile, an agreement in Libya between the central government and a regional militia is clearing the way for more exports there.
"The imminent return of Libyan supply to the market is continuing to weigh on prices," said analysts at Commerzbank in Frankfurt in a note to clients.
U.S. crude production, meanwhile, is at its highest in about two decades.
Investors now await information being released Wednesday by the Energy Information Administration on U.S. stockpiles of crude and refined fuels.
Data for the week ended July 4 is expected to show declines of three million barrels in crude oil stocks and of one million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
In other energy futures trading on the Nymex, wholesale gasoline fell 1.6 cents to close at US$2.973 a U.S. gallon (3.79 litres), heating oil fell four cents to US$2.874 a gallon and natural gas fell 2.1 cents to US$4.204 per 1,000 cubic feet.
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