The price of oil fell slightly Tuesday but experts see geopolitical tensions preventing any significant short-term declines.
Benchmark West Texas Intermediate crude for August delivery fell 17 cents to US$104.42 a barrel on the New York Mercantile Exchange. The more heavily traded September contract slipped 47 cents to US$102.39.
Brent crude for September delivery, a benchmark for international oils, dropped 35 cents to US$107.33 on the ICE Futures exchange in London.
Fighting between the Israeli military and Palestinian militants in Gaza has added to the risk of instability in the oil-rich Middle East just as tensions have intensified between the West and Russia, a major oil and gas producer, over the Ukraine crisis.
European leaders are considering tougher sanctions against Russia for its backing of separatists accused of shooting down the Malaysia Airways passenger plane in Ukraine last week. The European Union’s foreign ministers were meeting to discuss their next steps.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ended July 18 is expected to show a draw of 2.6 million barrels in crude oil stocks and a build of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Financial.
In other Nymex trading, wholesale gasoline fell one cent to US$2.88 a U.S. gallon (3.79 litres), heating oil was flat at US$2.85 a gallon and natural gas dropped one cent to US$3.77 per 1,000 cubic feet.