Crude Oil Ends Lower Ahead Of Supply Data, Fed Meet Outcome

(RTTNews) - U.S. crude oil ended lower for a second straight session on Tuesday, on some soft economic data out of the U.S. with investors looking ahead to the official inventories data and the outcome from the two-day Federal Reserve policy meet on Wednesday.

Some disappointing data from the U.S. related to inflation, pushed back crude oil prices after a report showed consumer prices to have risen in May, taking the annual inflation rate to its highest since late 2012. Meanwhile, housing starts in May declined more than expected reflecting decreases in both single-family and multi-family starts, while building permits for May also dropped.

Nonetheless, investors continued to keep a close watch over developments in Ukraine and Iraq, although concerns over the volatile situation in Iraq eased with government forces able to push back militants to a certain extent.

The American Petroleum Institute's report on inventories for the week ended June 13 will be out later in the day, while the U.S. Energy Information Administration is scheduled to release the official crude inventory data on Wednesday.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, dropped $0.54 or 0.5 percent to close at $106.36 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for July delivery scaled a high of $107.18 a barrel intraday and a low of $106.01.

On Monday, crude oil futures ended a tad lower after scaling a high of $107.54 a barrel intraday, with reports suggesting the oil producing areas in the country to be largely insulated from the strife.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.64 on Tuesday, up from its previous close of 80.44 late Monday in North American trade. The dollar scaled a high of 80.66 intraday and a low of 80.40.

The euro traded lower against the dollar at $1.3543 on Tuesday, as compared to its previous close of $1.3573 late Tuesday in North American trade. The euro scaled a high of $1.3587 intraday and a low of $1.3536.

Although fears of supply disruption from Iraq remained, oil retreated from higher levels Monday, on reports that the U.S. could collaborate with Iran to help the Iraqi government bring the country under control.

In economic news from the U.S., data from the Commerce Department showed housing starts to have declined 6.5 percent to an annual rate of 1.001 million in May, after jumping 12.7 percent to a rate of 1.071 million in April. Economists expected housing starts to drop to a rate of 1.030 million.

Meanwhile, building permits dropped 6.4 percent to an annual rate of 991,000 in May from the downwardly revised April rate of 1.059 million.

A report from the Labor Department showed consumer prices in U.S. to have risen by a more than expected 0.4 percent in May, up from 0.3 percent in April. Economists expected the index to edge up by about 0.2 percent. Higher prices for food, shelter, electricity, airline fares, and gasoline all contributed to the bigger than expected increase of the index.

In economic news from the eurozone, labor cost grew at a slower annual pace in the first three months of the year, rising 0.9 percent year-on-year, following a 1.6 percent gain in the fourth quarter last fiscal.

Meanwhile, U.K. inflation eased to a 55-month low of 1.5 percent in May, following a fall in transport and food costs. U.K. house price inflation accelerated in April, rising 9.9 percent annually, compared to an 8 percent rise in March.