West Texas Intermediate and Brent crudes fell on signs that the insurgency in Iraq won't curb output and as U.S. stockpiles climbed.

Iraq's crude exports will rise next month, Oil Minister Abdul Kareem al-Luaibi said yesterday. Government forces repelled an attack by the Sunni Islamic State in Iraq and the Levant on the Baiji refinery north of Baghdad. U.S. crude stockpiles rose by 1.74 million barrels to 388.1 million last week, the Energy Information Administration said yesterday.

"Prices are retreating because the insurgency hasn't had a material impact on the Iraqi production and we might be looking at a gain in exports," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "Prices are consolidating here just below the nine-month highs."

WTI for August delivery slipped $1.23, or 1.2 percent, to $105.27 a barrel at 10:51 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 7.5 percent below the 100-day average for the time of day. Futures are up 7 percent this year.

Brent for August settlement fell 74 cents, or 0.6 percent, to $113.26 a barrel on the London-based ICE Futures Europe exchange. Futures slipped to $113.11, the lowest level since June 18. Trading volume was 4.5 percent than the 100-day average. Prices have increased 2.2 percent this year.

The European benchmark crude traded at a $7.99 discount to WTI, up from $7.50 yesterday.

The price of gold is reduced by a stronger dollar after data on the U.S. labor market.

Number of new applications for unemployment benefits fell slightly last week, indicating that the improvement in the labor market.

The Labour Department said the seasonally adjusted number of initial claims for unemployment benefits fell for the week ending June 21, 2000 - to the level of 312 000. Economists forecast the value of this index level of 314 thousand

Meanwhile, the figure for the previous week was revised upward for 2000 - to a level of 314,000.

Another report showed that U.S. consumers have moderated their consumption by the end of May, despite higher revenue growth. This was stated in the report of the Ministry of Commerce.

According to data seasonally adjusted volume of personal spending rose in May by 0.2% (on a monthly basis). Last upgrade was entirely due to higher prices and followed zero change in April. Adjusted for inflation, spending decreased.

Meanwhile, the amount of personal income rose in May by 0.4%. Add that earnings growth for the past five months in a row, but Americans use a greater share for savings. Economists had expected personal spending will grow by 0.4%, while personal income - 0.5%.

The price index for personal consumption expenditures, which is the preferred sensor inflation for the Fed, rose 0.2% in May from April. In annual terms, index grew by 1.8%. Basic index rose by 0.2% on a monthly basis and by 1.5% per annum.

The cost of the August gold futures on the COMEX today dropped to $ 1306.8 per ounce.

Gold $1,322.20 +10.20 +0.78%

ICE Brent Crude Oil $114.22 -0.24 -0.21%

NYMEX Crude Oil $106.75 +0.03 +0.03%