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.

Gold price traded lower on a stronger U.S. dollar. The U.S. dollar rose against the euro on comments by the European Central Bank (ECB) officials and on the better-than-expected U.S. housing market data. The ECB Executive Board Member Benoit Coeure said on Monday that the ECB plans to expand its asset purchases in May and June due to low market liquidity in July and August. He added that a selloff in the European government bond market was a normal correction, but the pace of the selloff was worrisome.

The ECB Governing Council Member and the Bank of France Governor Christian Noyer said on Tuesday that there are signs that the central bank's monetary easing had a positive effect on inflation expectations. He added that the ECB was ready to take further action if needed to achieve its inflation target.

The U.S. Commerce Department released the housing market data on Tuesday. 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.

June futures for gold on the COMEX today declined to 1208.50 dollars per ounce.

Goldman Sachs lowered its crude oil price forecasts. It cut it Brent oil price forecast to $60-$65 for 2016-2019 and to $55 for 2020.

Goldman Sachs expects a $5 a barrel spread between Brent and WTI crude through 2016-2020.

The bank said that global oil demand will be covered by improved and effective U.S. shale oil and higher production from OPEC.

Short-term oil forecasts were upgraded. Goldman Sachs projects Brent crude oil this year at $58 a barrel, up from a previous estimate of $52, and WTI crude oil at $52 a barrel, up from a previous estimate of $48.

Kuwait OPEC Governor Nawal al-Fuzaia said on Monday that global crude oil prices are not expected to decline in the second half of 2015.

"It is expected that there will be some sort of a balance in the oil market in the second half of 2015 which will support prices," he said.

Nawal al-Fuzaia noted that it is too early to talk about OPEC's supply decision. Next OPEC's meeting is scheduled to be on June 05.

(raw materials / closing price /% change)

Oil 59.43 -0.44%

Gold 1,225.30 -0.19%