Oil prices traded lower on a stronger U.S. dollar and despite geopolitical tensions in the Middle East. The greenback was supported by the better-than-expected U.S. housing market data. Housing starts in the U.S. soared 20.2% to 1,135 million annualized rate in April from a 944,000 pace in March, exceeding expectations for a rise to 1.019 million. It was the highest level since November 2007.
The increase was driven by a gain in starts of single-family homes, which jumped to their highest level since January 2008.
Building permits in the U.S. climbed 10.1% to 1.143 million annualized rate in April from a 1.038 million pace in March. Analysts had expected building permits to increase to 1.064 million units.
Housing market seems to pick up as the weakness in first quarter of 2015 seems to be due to harsh weather. But housing market figures are in stark contrast with weakness in consumption, business spending and manufacturing.
Concerns over supply disruptions in the Middle East receded into the background as data showed that the oil production in the Gulf region increased. Crude oil exports from Saudi Arabia hit the highest level since 2005, according to the official data on Monday.
WTI crude oil for June delivery fell to $57.79 a barrel on the New York Mercantile Exchange. Brent crude oil for June decreased to $64.80 a barrel on ICE Futures Europe.