Oil prices were lower Tuesday after four-straight sessions of gains as traders remained cautious ahead of Federal Reserve Chairman Ben Bernanke's testimony to the U.S. Congress on Wednesday.
At 1011 GMT, Brent crude for July delivery on the ICE futures exchange traded lower, down 50 cents, or 0.5%, at $104.28 a barrel. Light, sweet crude for June delivery traded lower by 24 cents, or 0.3%, at $96.47 a barrel on the New York Mercantile Exchange.
Analysts said traders are waiting for the speech by Mr. Bernanke on the economic outlook for the U.S., the world's largest consumer of oil.
Traders will look for any signals in his address that the Fed is planning to end its monetary stimulus program, which has helped to boost oil markets. Any hint of a winding down of the program could lead to a sell-off in crude oil.
"The market is so used to liquidity these days that people are scared about QE [quantitative easing] coming to an end," said Amrita Sen, analyst at Energy Aspects. She said Brent prices were likely to stay in the $100 to $105 range in the coming trading sessions, with any potential rises capped by a weaker macro-economic environment.
The market has largely shrugged off supply risks in recent weeks, giving prices room to move higher as soon as traders turn their focus to tension in the Middle East and as the hurricane season in the U.S. approaches. Violent tornadoes swept through Oklahoma Monday afternoon, killing at least 51 people.
In Iraq, a string of car bombs and shootings Monday pushed the death toll since Wednesday to more than 230. Worsening tensions between Sunnis and Shiites has highlighted the fragile situation of the oil-producing country.
Excess refining capacity in Europe is likely to keep refining profits subdued, even despite colder-than-usual weather, usually a supportive factor for distillate demand in the region, Petromatrix said in a note.
At 1012 GMT, the ICE's gasoil contract for June delivery fell $3.00, or 0.3%, to $880.00 per metric ton, while Nymex gasoline for June delivery was down 231 points, or 0.8%, at $2.8825 per gallon.
