Forexpros – Crude oil futures trimmed losses during U.S. morning hours on Tuesday, coming off the lowest levels of the day after data showed U.S. existing home sales rose more-than-expected in April, but concerns over the global growth outlook kept the pressure on.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded at USD92.18 a barrel during European morning trade, shedding 0.49%.
The June contract is due to expire at the end of Tuesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Meanwhile, the more actively traded contract for July delivery dipped 0.25% to trade at USD92.61 a barrel.
It earlier fell by as much as 1.1% to trade at a session low of USD92.14 a barrel.
Oil prices came off the lows after the National Association of Realtors said that existing home sales rose by 3.4% to a seasonally adjusted 4.62 million units in April, beating expectations for a 2.9% increase to 4.60 million units.
The U.S. dollar moderated some of its gains following the data, easing pressure on dollar-denominated oil futures.
Prices were lower earlier in the day after the Organization for Economic Cooperation and Development trimmed economic growth forecasts. The Paris-based organization forecast euro-zone gross domestic product to contract by 0.1% in 2012 before returning to growth of 0.9% in 2013.
The outlook warned that a “combination of enduring financial fragility, rising unemployment and social pain may spark political contagion and adverse market reaction.”
The agency also forecast U.S. GDP growth of 2.4% this year and 2.6% in 2013, while Japan is forecast to expand 2% in 2012 and 1.5% in 2013.
Markets remained cautious ahead of Wednesday’s summit of European leaders, amid concerns over a divide between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.
President Hollande was expected to propose the introduction of joint euro bonds at the summit, but Germany has repeatedly resisted the idea, arguing they would lessen pressure for heavily indebted countries to get their finances in order.
Energy prices came under further pressure after the chief of the U.N. nuclear agency said he reached a deal with Iran on probing suspected work on nuclear weapons and adds that the agreement will “be signed quite soon. “
The agreement comes one day ahead of a second round of scheduled talks between Iran and major world powers scheduled in Baghdad.
Hopes for near-term monetary easing from China provided support to prices during Asian trading hours.
Oil traders were also looking ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 1 million barrels last week to the highest level since August 1990, underscoring fears over a slowdown in oil demand from the U.S.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery added 0.25% to trade at 109.08 a barrel, with the spread between the Brent and crude contracts standing at USD16.47.
Brent crude, the European benchmark, is nearly 15% off its intraday high of USD128.38 hit on March 1.
A potential loss of Iranian oil supplies has helped underpin strong gains in oil prices during late last year and the first quarter of this year.
But revived talks between Iran and major powers over Tehran’s nuclear ambitions, along with rising Saudi Arabian and Libyan output and signs of slower U.S. economic and employment growth, helped pull oil prices back from first-quarter highs.
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