U.S. Oil Futures Dip Below $100 a Barrel

By Christian Berthelsen 

NEW YORK--U.S. oil futures broke below the $100-a-barrel threshold for the first time in more than two months, as the return of Libyan barrels to the market and potentially bullish Fed comments for the U.S. dollar weighed on prices.

Light sweet crude futures for August delivery touched a low of $99.72 in early trading on the New York Mercantile Exchange Tuesday, falling below the $100 marker for the first time since May 12. The market has been in a prolonged selloff as fear premiums about geopolitical threats to supply stability from Ukraine and Iraq have eased, and Libya has finally resumed oil production after monthslong delays due to rebel strikes.

The global Brent contract was down $1.42 or 1.4% to $105.56 a barrel on the ICE Futures Europe exchange.

Libyan oil officials said the country's Sharara field had increased production to 554,000 barrels a day. Still, instability continued to plague the country, with a missile attack on the airport in the capital of Tripoli.

Meanwhile, some traders were preparing for testimony by Fed Chairwoman Janet Yellen that could strengthen the dollar, which can have an inverse impact on oil prices. Investors are watching Ms. Yellen's testimony for clues about when the Fed may begin to raise interest rates amid improving economic signals. The dollar recently ticked up against a basket of global currencies, rising 0.02% to 80.21 on the ICE U.S. Dollar index.

Front-month August futures for reformulated gasoline blendstock, or RBOB, were down 2.5 cents to $2.9001 a gallon on the Nymex. August diesel was down 2.85 cents to $2.8444 a gallon.

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