Brent oil dips

Brent crude oil futures touched a 10-week high close to $107 a barrel on Monday as tensions in the Middle East rose, but prices finished slightly lower on the day after a late sell-off in US gasoline futures. US crude oil hit a nine-month high near $99 a barrel but also reversed to settle lower, with investors cautious ahead of the start of the US Federal Reserve's two-day policy committee meeting on Tuesday.
The meeting may provide more clarity on when the central bank will reduce its stimulus program. Brent crude oil futures settled down 46 cents a barrel at $105.47. US crude shed 8 cents to finish at $97.77 a barrel. Brent's premium over US crude ended at $7.70, on the narrow end of the $7.50 to $10 range in which it has traded since early May.
US RBOB gasoline futures fell more than 1 percent as traders eyed refineries returning from planned work, including at BP's 405,000-barrel per day Whiting refinery in Indiana. Investors were cautious before the Fed meeting as Chairman Ben Bernanke may provide more clarity on how and when the central bank will reduce its stimulus program.
"People are going to want to hear what's going to come out of the G8 meeting and we also have the Fed meeting coming," said Mark Waggoner, president of Excel Futures in Bend, Oregon. "They're waiting on the sidelines." The market was also watching a stand-off over the civil war in Syria as President Barack Obama and Russia's Vladimir Putin sought to find common ground at the G8 meeting in Northern Ireland on how to bring Syrian leader Bashar al-Assad to the negotiating table.
Syria is not key to global oil supply, but investors are worried the civil war there could affect other countries in the Middle East and plunge the whole region into conflict. Analysts said any run-up on geopolitical risk would soon bump into a fundamental situation of ample supply and uncertain demand. "The market's made a big run up here, and it is going to rally into a fundamental situation that's oversupplied," said Andy Lebow, vice president at Jefferies Bache in New York. "There's a bullish backdrop to this rally, but when you get down to it, we have almost 400 million barrels of crude" in the US, he said.
US crude has gained nearly 7.5 percent since the beginning of June, when it traded as low as $91.26. On Friday, it pushed out of the $90-$97 band in which it had traded since May 1 to settle near $98. Brent crude is up 9 percent from its April low of $96.75. It has largely traded between $99 and $105 since the beginning of May. The election on Friday of a moderate as Iranian president tempered market worries. Investors waited to see if Iran's Hassan Rohani, who defeated hard-line rivals in the presidential election, would help resolve a dispute with the United States over Tehran's nuclear ambitions. The dispute has led to Western sanctions squeezing Iran's oil exports.
Traders were also closely watching for news on Norway's Oseberg field and several adjunct fields in the North Sea that were shut early on Monday. Operator Statoil said it was not clear when it would restart the fields, which produce nearly 120,000 barrels per day (bpd) of oil. US commercial crude oil stocks likely fell last week due to lower imports, a preliminary Reuters poll of eight analysts showed on Monday.