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Crude Oil Ends Lower On Continued Demand Concerns

U.S. crude oil futures closed lower Tuesday for a second straight day, on demand concerns as trade data from China showed imports had dropped in the second largest economy in the world and on a strengthening dollar. Oil prices were at its lowest since February.

Light Sweet Crude Oil futures for May delivery, dropped $1.44 or 1.4 percent to close at $101.02 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices scaled a high of $102.96 a barrel intraday and a low of $100.68.

China recorded a $5.35 billion trade surplus in March, but import growth eased back from a 13-month peak while exports grew faster than expected, customs data showed.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.82 on Tuesday, up from 79.79 in North American trade late Monday. The dollar scaled a high of 80.02 intraday, with a low of 79.60.

The euro was trading lower against the dollar at $1.3100 on Tuesday, as compared to $1.3106 late Monday. The euro had scaled a high of $1.3144 intraday with a low of $1.3056.

There were renewed concerns over the eurozone debt crisis with yields on government bonds in Italy and Span soaring. The 10-year Italian bonds rose 31 basis points to 5.67 percent, the highest since mid February. Meanwhile, yields on government bonds in Spain rose to its highest since end November, increasing 19 basis points to 5.93 percent, just short of the closely-watched 6 percent.

In economic news, the U.S. Commerce Department's figures indicate the level of inventories for wholesalers at a seasonally adjusted level of $478.9 billion in February, reflecting a 0.9 percent increase from January levels. Most economists expected a more modest 0.6 percent increase in inventories. Further, January figures, which had initially shown a 0.4 percent increase in inventories, were upwardly revised to show 0.6 percent growth.

From the eurozone, Germany's merchandise trade surplus increased more than economists expected in February, data released by the Federal Statistical Office showed. The trade surplus increased to euro 14.7 billion in February from euro 11.9 billion a year earlier. Economists were looking for a trade surplus of euro 12 billion. On a seasonally adjusted basis, the trade balance was a surplus of euro 13.6 billion.

Nevertheless, there were renewed concerns over the eurozone debt crisis with yields on government bonds in Italy and Span soaring. The 10-year Italian bonds rose 31 basis points to 5.67 percent, the highest since mid February. Meanwhile, yields on government bonds in Spain rose to its highest since end November, increasing 19 basis points to 5.93 percent, just short of the closely-watched 6 percent.

by RTT Staff Writer

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