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Crude oil futures lower ahead of U.S. supply data

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Shutterstock photo - Crude oil futures edged lower on Tuesday, as investors looked ahead to the release of key U.S. weekly supply data to gauge the strength of oil demand from the world's largest consumer.

Oil futures fell sharply on Monday after data showed that U.S. existing home sales fell unexpectedly in June, fuelling concerns over the health of the U.S. economy.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD106.08 a barrel during European morning trade, down 0.8% on the day.

New York-traded oil prices fell by as much as 0.9% earlier in the session to hit a daily low of USD106.02 a barrel, the weakest level since July 18.

Oil traders looked ahead to the release of 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 fell by 2.5 million barrels.

Crude supplies in the U.S. are down 27.1 million barrels in three weeks ended July 12, the most in weekly statistics dating back to 1982.

Oil prices have been well-supported in recent sessions amid indications of improving demand from the U.S.

New York-traded oil prices rose to a 16-month high of USD108.92 a barrel on July 19. The U.S. benchmark has rallied nearly 14% over the past four weeks.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery eased down 0.25% to trade at USD107.92 a barrel, with the spread between the Brent and crude contracts standing at USD1.84 a barrel.

Wall Street investment bank Goldman Sachs Group forecast U.S. crude's discount to Brent is likely to average from USD8-to-USD9 a barrel in 2014 amid a supply glut on the Gulf Coast.

U.S. crude for September delivery reached a USD0.05 premium over Brent last week for the first time since August 2010. As recently as February of this year, London-traded Brent was at a USD23 premium over U.S. crude.

The gap between the contracts has been on a downward trend in recent months, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.

Stocks at Cushing have fallen to 46.1 million barrels, the lowest level since November. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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