U.S. crude oil futures ended sharply lower for a third day in a row Monday on demand growth concerns, as the news of a bailout plan for Spain's banking sector failed to enthuse traders. Investors appeared unsettled on continued eurozone contagion fears as the bailout plans did not provide enough clarity. Oil prices had moved up earlier in the day on data that China's oil imports surged in May.
Spain on Saturday revealed plans for seeking financial assistance of about 100 billion euros from the European Union to help bailout its banking sector. Spain's banking sector was severely impacted on bad loans after the housing market collapsed.
Light Sweet Crude Oil futures for July delivery, dropped $1.40 or 1.7 percent to close at $82.70 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $86.64 a barrel intraday and a low of $82.69.
Oil prices settled lower last week, after the Federal Reserve failed to hint on further monetary stimulus measures, notwithstanding an upward movement after China announced an unexpected cut in lending rates to stimulate growth.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 82.457 on Monday, up from 82.439 in North American trade late Friday. The dollar scaled a high of 82.58 intraday and a low of 81.79.
The euro traded lower against the dollar at $1.2505 on Monday, as compared to $1.2512 late Friday. The euro scaled a high of $1.266 intraday and a low of 1.2484.
In economic news, data from the Organization for Economic Cooperation and Development indicated an improvement in economic activity in April. The composite leading indicator, designed to anticipate turning points in economic activity relative to trend, rose to 100.5 in April from 100.4 in March. However, when compared to April last year, the index dropped 0.47 percent.
Activity in the eurozone continued to be below its long-term trend, and the corresponding indicator remaining unchanged at 99.6 for the third consecutive month.
The sub-indicator for the United States remained stable at 101.2 during the month, indicating improving economic activity. The index for the United Kingdom signaled activity remained slightly below the long-term trend, as was the case with Canada and Germany.
During the week, Investor focus will mainly be on the U.S. Commerce Department's retail sales report for May, the New York Federal Reserve's manufacturing survey for June, the Federal Reserve's industrial production report for May, the weekly jobless claims report, and the Reuters and the University of Michigan's consumer sentiment index for June.
Also on focus would be on the data on crude oil inventories from the American Petroleum Institute on Tuesday, followed by the Energy Information Administration U.S. oil stockpile report on Wednesday.
by RTT Staff Writer
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