Oil prices dropped today on worries that the US Federal Reserve could start trimming its economic stimulus programme; however, prices received some support due to supply concerns.

Brent crude fell by 51 cents to $109.31 a barrel, while US oil dipped by 43 cents to reach $106.40 a barrel, reported Reuters.

US retail sales increased for July, adding to market expectations that the Fed could start reducing its major economic stimulus package.

In its weekly report, the American Petroleum Institute (API) said US crude oil stockpiles decreased last week; however, the decline was smaller than expected.

Jobless figures in the US have fallen nearly a percentage point in the last year, nevertheless the figure remains historically high, at 7.4%.

"Jobless figures in the US have fallen nearly a percentage point in the last year."

Prices got some support from concerns about supply disruptions from the Organization of the Petroleum Exporting Countries (OPEC) members, Libya and Iraq.

Libya could not issue oil export plans for September, as unsettled labour disputes at its terminals have disrupted operations.

Iraq’s key southern export hub is expected to undergo maintenance and slash supplies by 500,000 barrels per day (bpd) in September.

Image: Oil prices tumbled as retail data added to growing concerns over the US stimulus outlook. Photo courtesy of freedigitalphotos.