NEW YORK, July 22 (Reuters) - U.S. oil prices pulled back sharply on Monday from last week's 16-month high as traders sold to lock in profits from a blistering rally that briefly sent U.S. crude to a premium over Brent for the first time in nearly three years.
Europe's benchmark Brent crude increased its premium over U.S. West Texas Intermediate on Monday, with the September <CL-LCO1=R> contract trading $1.47 higher than its U.S. equivalent as support from tight U.S. supplies eased.
The August WTI contract tumbled more than 1 percent and finished below $107 a barrel ahead of its expiration later in the day, while the September contract showed smaller losses.
"We thought $110 was a price target but the more the market dips into this range the more you'll see profiteers," said Rich Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.
The WTI contract for August delivery lost $1.14 cents, settling at $106.91.
September WTI fell 93 cents to settle at $106.94, converging with the expiring August contract as traders settled their front-month positions. The October WTI contract was significantly weaker, trading at $1.47 below the September price.
September Brent crude gained slightly, climbing 8 cents to settle at $108.15.
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