Oil slips on U.S. housing data; pump prices steady
Meanwhile the average price of gasoline in the U.S. stayed at $3.67 a gallon over the weekend after rising steadily for two weeks.
By early afternoon in New York, benchmark crude was down 68 cents to $107.19 a barrel on the New York Mercantile Exchange.
Sales of previously occupied homes in the U.S. slipped 1.2 percent in June to a seasonally adjusted annual rate of 5.08 million. Any sign that the U.S. economic recovery is slowing can depress oil prices.
Oil is still up nearly $14 a barrel since June 21, underpinned by sharp declines in U.S. stockpiles and concerns of supply disruptions in the Middle East.
Some analysts, however, say the fundamental rules of supply and demand alone do not justify the rise and speculators are also pushing the price higher.
"While crude oil stocks have declined for three weeks in a row, fundamentals in the gasoline and distillates markets appear less supportive," said a report from JBC Energy in Vienna. "Stock levels for oil products are in line or above the 5-year average, and domestic demand is anything but impressive."
Energy analysts at The Schork Group Inc. said open interest, which is the number of open futures contracts, is at record levels as is participation of Wall Street hedge funds and investors such as commodity pool operators. They said in a report that Wall Street now owns six times as many barrels of oil in the WTI futures market as there are sitting at the Nymex oil delivery terminal in Cushing, Oklahoma.
WTI's jump has been so sharp that is has closed most of its discount to Brent crude, which is traded on the ICE Futures exchange in London. September Brent was down 7 cents to $108 a barrel.
Oil's rise has meant more expensive gasoline across the U.S. Since July 1 the average price for a gallon has risen 25 cents in Delaware and New Jersey, 26 cents in Ohio and 32 cents in Indiana. Prices have declined in just three states: Colorado, Idaho and Utah.
In other energy futures trading on the Nymex:
-- Wholesale gasoline lost 5 cents to $3.08 a gallon.
-- Heating oil gave up 1 cent at $3.08 a gallon.
-- Natural gas retreated 12 cents to $3.67 per 1,000 cubic feet.
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