Crude dives on Cyprus bank tax uncertainty, shrugs off U.S. housing data

Investing.com - Oil prices dipped in U.S. trading on Tuesday as Cyprus addressed a multilateral proposal to levy taxes on the country's bank depositors, a measure that has rattled markets worldwide and sent investors avoiding growth-sensitive energy commodities and snapping up safe-haven dollar positions.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded down 0.98% at USD93.19 a barrel on Tuesday, off from a session high of USD94.45 and up from an earlier session low of USD93.11.

Policymakers in Cyprus were scrambling to find ways to raise EUR5.8 billion to comply with European and IMF terms to secure EUR10 billion in bailout financing in ways that did not involve asking bank depositors to take a haircut on their savings to help restore the country to fiscal health at the time of writing on Tuesday.

The Cypriot parliament has yet to cast final votes on the proposal, though talk Finance Minister Michalis Sarris might step down over the matter largely repelled investors away from oil.

Better-than-expected housing data in the U.S. failed to curb oil's declines.

The Commerce Department reported earlier that the number of building permits issued in February hit its highest level since June 2008.

Housing starts beat expectations as well, cementing widespread views that the country’s economic recovery is gaining steam.

Building permits issued in February rose 4.6% to 946,000 units, above market calls for a 2.3% increase to 925,000.

U.S. housing starts, meanwhile, rose by 0.8% in February to 917,000 units, better than analysts' calls for a jump to 915,000.

Investors also remained on the sidelines to await official data on U.S. oil inventories due out on Wednesday.

Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were down 1.26% at USD108.14 a barrel, up USD14.95 from its U.S. counterpart.