Investing.com - Crude prices fell on Tuesday in wake of a bearish report from the International Energy Agency as well as perceptions that Iraqi oil exports will flow as normal despite an insurgency taking place in the country.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in September traded down 0.95% at $97.15 a barrel during U.S. trading. New York-traded oil futures hit a session low of $96.87 a barrel and a high of $97.94 a barrel.
The September contract settled up 0.44% at $98.08 a barrel on Monday.
Nymex oil futures were likely to find support at $96.55 a barrel, last Thursday's low, and resistance at $98.58 a barrel, Monday's high.
The International Energy Agency earlier cut its 2014 global oil demand growth forecast by 180,000 barrels per day to 1.0 million due to lower‐than‐expected deliveries in the second quarter and the International Monetary Fund's weaker outlook for economic growth.
As the economy improves in 2015, the agency said, demand is set to accelerate 1.3 million barrels per, though crude futures fell on concerns that the global economy is awash in crude.
"Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin," the IEA said in its monthly oil-market report.
Waning fears of supply disruptions pressured prices lower as well.
In Iraq, Haidar al-Abadi, the deputy speaker of parliament, was named as the country's new prime minister on Monday in place of Nuri al-Maliki, who has refused to step down.
Maliki said the decision was a "dangerous violation" of the constitution and vowed to "fix the mistake".
U.S. President Barack Obama said the naming of Abadi was an important step for Iraq towards rebuffing Islamic State militants.
The U.S. recently began air strikes targeting militants from the Islamic State insurgent group in the northern part of the country in an effort to protect Iraqi civilians from the uprising as well as U.S. personnel in the country.
Still, the country's major oilfields remain far to the south of the fighting, and with U.S. airstrikes halting the advance, fears of supply disruption eroded further on Tuesday, which further dampened oil futures.
Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were down 1.43% and trading at US$103.89 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$6.74 a barrel.
Original headline: Crude drops on IEA report, waning fears of Iraq supply disruptions
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