NEW YORK--Oil futures failed to hold above $105 a barrel Tuesday but held near multi-month highs ahead of an expected drop in U.S. oil supplies.
Light, sweet crude for July delivery settled down 6 cents, or 0.1%, at $104.35 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell 47 cents, or 0.4%, to $109.52 a barrel.
Prices climbed as high as $105.06 a barrel in intraday trading on expectations that government data would show that U.S. supplies fell for a second straight week last week.
Analysts expect the U.S. Energy Information Administration to report that supplies fell by 1.7 million barrels in the week ended June 6, according to a Wall Street Journal survey.
The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EDT Wednesday.
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 1.5 million-barrel increase in crude supplies, according to industry sources.
U.S. oil supplies stood at 389.5 million barrels in the week ended May 30, the lowest level in nearly two months but still near the record high of 399.4 reached in the week ended April 25.
But prices slipped midday after failing to hold above $105 a barrel. Futures last settled above that level Sept 6.
"We just don't have enough momentum to get us up there at this stage of the game," said Dominick Chirichella, analyst at the Energy Management Institute. "The market's looking for an excuse to get out of some of these positions."
Market participants are also waiting for news from the Organization of the Petroleum Exporting Countries' meeting on Wednesday in Vienna. The cartel is expected to leave its oil-production ceiling unchanged, but Saudi Arabia is expected to increase its output in the second half of the year to replace halted Libyan production.
Front-month July reformulated gasoline blendstock, or RBOB, settled down 1.03 cents, or 0.4%, at $2.9745 a gallon. July diesel slipped 0.71 cent, or 0.3%, to $2.8841 a gallon.