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Oil ends modestly lower as geopolitics take a backseat--for now

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Brent and U.S. crude edged lower in choppy trading on Tuesday as oil supplies remained unaffected by continuing violence in Iraq, Ukraine and Gaza.


European Union foreign ministers in Brussels have asked the European Commission to look at Russian defence, energy and financial services sectors when considering new sanctions against Russia, the world's second-largest oil exporter, over the conflict in eastern Ukraine.

In the Middle East, violence raged as Israel pounded the Gaza Strip, pushing the Palestinian death toll to more than 500, while Israel's losses mounted to 13.

Brent crude for September delivery fell by 20 cents to stay under $108 per barrel, after swinging by nearly $1 between a low $107.45 and a high of $108.40. U.S. oil for August delivery edged down 17 cents to settle at $104.42 a barrel, down from a session high of $105.25 but above a session low of $104.11.

The U.S. August contract expires on Tuesday. Its premium to September crude increased Tuesday to more than $2, reflecting traders' concerns of low oil inventories at the Cushing, Oklahoma, delivery point for U.S. crude.

Oil traders will turn their focus later to weekly U.S. commercial crude oil inventories, which are predicted to have fallen by 2.8 million barrels in the week to July 18, according to a preliminary Reuters survey of four analysts.

The survey was taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) due at 2030 GMT on Tuesday and from the U.S. Department of Energy's Energy Information Administration (EIA) on Wednesday. Domestic crude stocks fell by 7.5 million barrels the previous week, the biggest draw since January, caused by a sharp increase in refinery activity.

--By Reuters. For more information on commodities prices, please click here.