Crude prices drop as Iraq worries ease

Crude prices retreated on Monday as market concerns that Iraq unrest would disrupt crude output diminished.

Kurdish and Iraqi forces on Monday regained control of the critical Mosul Dam in northern Iraq from Islamic State's militants who seized it two week ago. The recapture of the Iraq's largest dam offered assurance to investors that Iraq's oil supplies are not in immediate risk of disruption.

Meanwhile, easing of Ukraine tensions also weighed on crude prices after talks between Russia and the West were reportedly making progress in talks over the Ukraine crisis.

German Foreign Minister Frank-Walter Steinmeier said early Monday that some progress was made in the "difficult" quadrilateral talks held in Berlin during the weekend among the foreign ministers of Germany, France, Russia and Ukraine.

Russian Foreign Minister Sergei Lavrov said Monday that all the issues regarding the delivery of humanitarian aid to Ukraine had been solved, but no progress had been made toward a ceasefire.

Russia is an important oil production country, and most of Russian crude and gas exports to Europe pass through Ukraine.

Light, sweet crude for September delivery moved down 94 cents to settle at 96.41 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery lost 1. 93 dollars to close at 101.6 dollars a barrel.