Oil price retreats on profit-taking

U.S. oil price dropped Tuesday as traders cashed profit after it gained 4 percent last week on Iraq worries.

The market is awaiting a U.S. crude supplies report for last week which is due to be released Wednesday by the Energy Information Administration (EIA), the Energy Department's statistical arm.

The Federal Reserve started a two-day meeting Tuesday. The market expected the Fed to announce another 10 billion U.S. dollars cut to its monthly bond-buying program.

New York traders appeared to book profits from recent rallies as the crude prices reached a nine-month high last week. The gain last week was the biggest weekly increase this year, as the Iraq unrest fueled concern that supplies from OPEC's second-largest producer may be disrupted.

The geopolitical risks in Iraq continued to support the crude market, especially the Brent oil.

Light, sweet crude for July delivery moved down 54 cents to settle at 106.36 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery gained 51 cents to close at 113.45 dollars a barrel.