Oil slipped from a six-month high above $60 a barrel on Tuesday along with other commodities and stock markets as data showed U.S. housing starts fell to a record low in April, tempering hopes of economic stabilization.
U.S. crude oil for June lost ground shortly after the release of the housing data, having hit a six month high of $60.48 a barrel earlier in the day.
The contract was up 22 cents to $59.25 by 10:31 a.m. EDT ahead of its expiry late in the day. The more actively traded July contract was trading 35 cents down at $59.24.
North Sea Brent for July was 21 cents down at $58.26.
Other commodities and European shares pared earlier gains. U.S. stocks fell at the open then turned positive <.EU> <.N>
Housing led the U.S. economy into recession and the April figures released today are a stark reminder that we are not yet out of the woods, Harry Tchililnguirian, BNP Paribas' senior oil analyst, said.
The oil market still needs to face up to high levels of inventory, so far kept off the market, and contractionary economic activity in the first half of this year.
Oil prices have been on an upward trend since mid-April in equity-led rallies despite soft demand and heavy oil inventories. They have also recovered from below $33 in December last year after a plunge from record highs above $147 in July.
Earlier in the day, unrest in key producer Nigeria and a U.S. refinery outage kindled concerns over oil fundamentals, supporting oil prices.
Key African and OPEC producer Nigeria has long suffered from losing part of its oil output and missing export obligations due to insecurity in the oil-rich Niger Delta.
The main militant group said on Monday it would blockade key waterways in the delta to try to prevent crude oil exports after days of military helicopter and gunboat raids on its camps.
In the world's top consumer the United States, a fire on Sunday disrupted output at Sunoco's refinery in Pennsylvania, pushing U.S. RBOB gasoline to a seven-month high ahead of the peak summer driving season.
Traders will shift their focus to two sets of U.S. weekly oil data later on Tuesday and Wednesday. Analysts expect the data to show falls in crude oil and gasoline inventories by 700,000 barrels and 1.0 million barrels, respectively.
(Reporting by Chua Baizhen in Singapore and Ikuko Kao in London; Editing by Keiron Henderson)