Oil prices drop on ample supplies

Oil prices retreated Tuesday on forecasts that U.S. crude inventories increased last week.

Energy Information Administration, the statistics arm of the U. S. Department of Energy, is scheduled to release a report Wednesday on U.S. crude supplies of last week. Markets expected to see another build in crude inventories. U.S. crude stockpiles is estimated to expand by 1.75 million barrels last week.

Increasing crude output from Libya also put some downward pressure on oil. Libyan government and the rebels reached a deal recently on reopening the oil ports.

Market was optimistic about the talks and expecting several hundred thousand barrels of Libyan crude will soon flow to the international market. Libya is right on Europe's doorstep and it has more impact on Brent price.

U.S. economic data came in mixed. U.S. builder confidence in the market for newly built, single-family homes edged up one point to 47 in April from a downwardly revised March reading of 46, according to the latest Housing Market Index by the National Association of Home Builders/Wells Fargo.

Moreover, manufacturing activity in the New York region was flat in April, with the headline general business conditions index unexpectedly slipping four points to 1.3, according to a survey released Tuesday by the Federal Reserve Bank of New York.

Furthermore, the U.S. Consumer Price Index for all urban consumers increased 0.2 percent in March on a seasonally adjusted basis, said the Labor Department.

Light, sweet crude for May delivery moved down 30 cents to settle at 103.75 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery lost 33 cents to close at 108.74 dollars a barrel.