Investing.com – Crude futures edged lower on Monday as fears that the Iraqi insurgency will affect the country’s major oilfields continued to wane, which gave investors room to unwind positions that had priced in the possibility of major supply disruptions.
In the New York Mercantile Exchange, West Texas Intermediate crude oilfor delivery in August traded at $105.37 a barrel during U.S. trading, down 0.35%. New York-traded oil futures hit a session low of $104.67 a barrel and a high of $105.75 a barrel.
The August contract settled up 0.09% at $105.74 a barrel on Friday.
Nymex oil futures were likely to find support at $101.89 a barrel, the low from June 9, and resistance at $107.50 a barrel, last Tuesday’s high.
Oil prices continued their downward trend 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 the insurgency 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
Iraqi security forces have launched a counterattack against the Sunni militant insurgency, with reports that tanks and armored vehicles are pushing through to retake cities claimed by the rebels wiping out crude’s supply-disruption premium.
Mixed U.S. data pushed oil prices lower as well.
The National Association of Realtors reported earlier that pending home sales jumped 6.1% in May from April, rising to its highest level since last September. May’s figure marked the largest increase since August 2010 and far surpassed forecasts for a 1.5% reading.
Spooking investors, however, was an industry report revealing that the Chicago purchasing managers’ index declined to 62.6 this month from 65.5 in May, missing expectations for a 63.0 reading.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for August delivery were down 0.76% and trading at US$112.44 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$7.07 a barrel.