Oil prices dropped on Tuesday as traders awaited key interest rate decisions from the U.S. Federal Reserve and the European Central Bank (ECB) later this week.

The oil prices were buoyed up by expectations for easy monetary policies from major central banks on Monday. Economists had predicted that the ECB would cut interest rates this week, while the Fed would consider renewing its commitment to stimulus measures at a two-day policy meeting starting on Tuesday.

But Tuesday's market was dragged down as traders took profit from the recent rally that pushed the oil prices to two-week highs.

On the economic front, U.S. home prices for the 20-City Composite Index rose 9.3 percent in February from the same period of last year, the biggest year-on-year gains since May 2006, according to a report released on Tuesday by S&P Dow Jones Indices.

Despite some recent mixed economic reports for March, the housing sector continues to be one of the brighter spots in the economy, said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices.

Meanwhile, U.S. consumer confidence increased in April after an unexpected drop in March. The Conference Board Consumer Confidence Index reached 68.1 in the month, higher than the revised figure of 61.9 in March and market estimates.

Light, sweet crude for June delivery lost 1.04 dollars to settle at 93.46 dollars a barrel on the New York Mercantile Exchange.

Brent for June delivery went down 1.44 dollars, or 1.38 percent, to close at 102.37 dollars a barrel.

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