Crude prices fell on Tuesday on faded hopes for stimulus plans from both the U.S. Federal Reserve and the European Central Bank.

The Fed started its two-day policy meeting on Tuesday, which had been hoped to adopt another round of quantitative easing to boost the sluggish economy.

But a string of upbeat data released on Tuesday lowered the chance of more stimulus plans.

The U.S. personal income rose 0.5 percent in June, beating previous expectations of a 0.2 percent increase, while consumer spending kept unchanged.

The S&P/Case-Shiller Home price index, the leading measure of U. S. home prices, showed that on average home prices increased by 2. 2 percent in May over April for both the 10- and 20- City Composites, showing improvement in the struggling house markets.

Meanwhile, the Chicago PMI composite rose to 53.7 in July, indicating a boost in Midwest business activity.

In Europe, the central bank will hold policy meeting on Thursday. As the region's economies fell into deeper recession, investors thought the potential stimulus plans would not be enough to boost the confidence.

But in the Middle East, continuing tension between Iran and the West and clashes in Syria still offered lifts to oil prices.

The U.S. President Barack Obama on Tuesday announced new sanctions against Iran over Tehran's disputed nuclear program. According to data, Iran's oil output had already fallen by 150,000 barrels a day to the lowest level in more than two decades. Light, sweet crude for September delivery lost 1.72 dollars, or 1.92 percent, to settle at 88.06 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for September delivery also dropped and last traded below 105 dollars a barrel.