Oil prices retreat before Fed policy meeting

Oil prices retreated on Monday on speculation that the Federal Reserve may taper its stimulus program at its policy meeting this week. Light, sweet crude for July delivery lost 8 cents, to settle at 97.77 U.S. dollars a barrel on the New York Mercantile Exchange. Brent for July delivery decreased 46 cents, or 0.43 percent to close at 10547 dollars a barrel. On the economic front, manufacturing activity in the New York region improved modestly in June, according to a survey released Monday by the Federal Reserve Bank of New York. The general business conditions index rose 9 points to 7.8 after dipping into negative territory in May. Meanwhile, U.S. home-builder confidence hit a significant milestone in June, an industry survey showed. The National Association of Home Builders/Wells Fargo Housing Market index surged 8 points to a reading of 52 in June, the first time that the index rallied above 50 since April 2006. Any reading over 50 indicates that more builders view sales conditions as good than poor, the association said. Led by strong auto sales, U.S. retail and food services sales for May rose 0.6 percent to 421.1 billion dollars from the previous month, beating economists' forecast of a 0.5 percent increase, the Commerce Department said on Thursday. Strong economic data boosted the speculation that the Fed might reduce stimulus at its meeting scheduled for Tuesday and Wednesday. The U.S. dollar rose against major currencies except the euro Monday. A stronger greenback will decrease the demand of dollar- priced oil for non-American buyers.