U.S. crude oil ended lower Monday, ahead of the weekly official oil report from the Energy Information Administration, weighed down on reports that global demand for oil is likely to decline.
Investors largely ignored some positive economic data, with homebuilder confidence in the U.S. unexpectedly improving for a third consecutive month in August, to its highest level in seven months.
Last week’s weak economic data from the eurozone, an unexpected increase in U.S. crude oil stockpiles and the resumption of supplies from Libya also contributed to oil’s decline.
Although an end to the tensions between Russia and the West are not in sight as yet, reports that Russian convoys will be allowed to carry humanitarian aid to eastern Ukraine have helped ease concerns a bit.
Investors are also continued to monitor developments in Iraq and Gaza where unrest continues.
Libya’s exports are getting back online with the re-opening of its largest port, Es Sider, which was closed for nearly a year. Earlier last week, oil cargo was loaded from Libya’s third largest port, Ras Lanuf, for the first time in almost a year.
Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $0.94 or 1.0 percent to close at $96.41 a barrel on the New York Mercantile Exchange Monday.
Crude prices for September delivery scaled a high of $97.16 a barrel intraday and a low of $95.81.
On Friday, crude oil futures ended sharply higher, bouncing back on reports of escalating tensions between Russia and Ukraine. Some short-covering after Thursday’s sharp plunge too contributed to oil’s uptrend. For the week, oil shed 0.3 percent.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.58 on Monday, up from its previous close of 81.45 late Friday in North American trade. The dollar scaled a high of 81.61 intraday and a low of 81.38.
The euro traded lower against the dollar at $1.3361 on Monday, as compared to its previous close of $1.3392 late Friday in North American trade. The euro scaled a high of $1.3399 intraday and a low of $1.3354.
In economic news from the U.S., homebuilder confidence unexpectedly improved for the third consecutive month in August, a report from the National Association of Home Builders showed Monday. The NAHB/Wells Fargo Housing Market Index climbed to a reading of 55 in August from 53 in July. Economists expected the index to come in unchanged compared to the previous month.
Among the key economic events this week include the FOMC minutes, data on U.S. new home and existing home sales in July, report on weekly jobless claims, the Philadelphia Federal Reserve’s manufacturing survey for August, and consumer price inflation report for July. The Conference Board’s economic indicators are also in focus this week.
In economic news from the eurozone, data from Eurostat showed eurozone trade surplus to have increased unexpectedly in June, rising to EUR 16.8 billion from EUR 15.4 billion in May. Economists expected the trade surplus to decrease to EUR 15.1 billion.
Meanwhile, Bundesbank in its monthly report said geopolitical tensions may weigh on Germany’s economic outlook.
The material has been provided by InstaForex Company – www.instaforex.com