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Crude Oil Settles Lower As Dollar Strengthens

U.S. crude oil futures closed lower Monday, mostly on a strong dollar and profit taking, despite lingering supply concerns from the Middle East over Iran's stand-off with the west on its nuclear program.

Light Sweet Crude Oil futures for April delivery, dropped $1.21 or 1.1 percent to close at $108.56 a barrel on the New York Mercantile Exchange on Monday. Crude prices had scaled a high of $109.77 a barrel intraday and a low of $108.24 a barrel.

Last week, oil rose over 6 percent to end near a 10-month high on a weak dollar with supply concerns as market sentiments largely influenced by Iran's stand-off with the west, fueled fears of possible supply disruption from the Middle East.

The surge in oil price was also discussed at the G20 meeting of finance ministers and central bank heads on Monday. A statement issued after the meeting said the group had taken cognizance of the higher oil prices, while indicating that the biggest oil producer Saudi Arabia had promised to lift its production level to the maximum.

The euro pared gains made last week and was trading at $1.3397 on Monday, down from $1.3462 late Friday. The euro had scaled a high of $1.3478 intraday.

The dollar index, which tracks the U.S. unit against six major currencies, rose to 78.552 on Monday from 78.341 late on Friday.

In the U.S., the National Association of Realtors said its pending home sales index rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December. Economists had been expecting to index to increase by about 1.5 percent.

In other economic news, eurozone's broad monetary aggregate M3 grew 2.5 percent year-on-year in January, according to data published by the European Central Bank. The increase exceeded December's 1.5 percent rise and the 1.8 percent rise forecast by economists.

During this week, traders focus will be on the Commerce Department's durable goods orders report for January, the ISM-Chicago's business barometer for February, the Institute for Supply Management's national manufacturing survey for February, the weekly jobless claims report and the Conference Board's consumer confidence index for February.

Also on focus will be the crude oil inventories data from the API, due out Tuesday after market hours, and the EIA due out the subsequent day.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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