The price of US oil fell to near $106 a barrel today as traders responded cautiously to data showing that a stubborn recession in the euro zone has ended.
Benchmark crude for September delivery was down 60 cents to $106.23 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 72 cents to close at $106.83 last night.
Brent crude, traded on the ICE Futures exchange in London, was down 48 cents to $109.34 a barrel.
The European Union countries that use the euro saw their collective economic output grow by 0.3% in the April-June quarter from the previous quarter, according to data today.
That is the first quarterly growth since the euro zone slipped into recession at the end of 2011.
But the result came largely on the back of improving conditions in Germany and France, which had already escaped the most grueling effects of the recession.
A relatively stronger dollar also worked against oil prices. Oil is traded in dollars and becomes a less attractive investment for holders of other currencies when the value of the greenback rises. In recent days, the dollar has posted gains against the Japanese yen, the Swiss franc, and the currencies of commodity-driven countries including Australia and Canada.
That could partly explain the falling price of oil in the face of the brighter economic data from Europe and the US.
Looking ahead, investors will monitor renewed protests in Egypt, which controls the Suez Canal crucial for Middle East oil shipments, and falling oil exports in Libya and Iraq.
Markets were also awaiting information later today on US stockpiles of crude and refined products from the Energy Department's Energy Information Administration. Data for the week ending August 6 is expected to show draws of 1.5 million barrels in crude oil stocks and 2 million barrels in petrol stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill.
A release last night from the American Petroleum Institute showed crude stocks dropping by 1 million barrels but large builds in refined products, including an increase of 1.7 million barrels in petrol inventories.
