Oil prices fall amid concerns over Fed

Oil prices dropped Wednesday on concerns that the Federal Reserve might cut stimulus program as data showed U.S. economy is improving. With no important economic data due Wednesday, investors will be keeping an eye on weekly initial jobless claims and the second estimate for the U.S. gross domestic product (GDP) in the first quarter Thursday. Improvement in the U.S. economy, especially the housing sector, has sparked speculation that Fed will pull back the stimulus measures. U.S. home prices continued the upward trend in March, according to a report released Tuesday by S&P Dow Jones Indices. The S&P/ Case Shiller U.S. National Home Price Index recorded a 10.2 percent gain in the first quarter of 2013 over the first quarter of 2012. At the same time, U.S. consumer confidence increased again in May to hit a five-year high. The current oil price is suitable for producers and consumers, Saudi Arabia's Petroleum and Mineral Resources Minister Ali al- Naimi said Wednesday. The kingdom is the world's biggest crude exporter. On the economic front, the U.S. mortgage application activity dropped for the third straight week as key interest rates reached their highest levels in a year, the Mortgage Bankers Association reported Wednesday in its Weekly Applications Survey for the week ending May 24. Light, sweet crude for July delivery lost 1.88 dollars, or 1.98 percent, to settle at 93.13 dollars a barrel on the New York Mercantile Exchange. Brent for July delivery went down 1.8 dollars, or 1.72 percent, to close at 102.43 dollars a barrel.