U.S. crude oil snapped a four-day winning streak to end a tad lower Monday, after US plans to release emergency oil reserves to control rising gasoline prices faced resistance from the International Energy Agency. Investors also weighed reports of increased Saudi Arabian oil production and growth in demand. The dollar dropped against most major currencies but continued to trade marginally higher against the euro,
Light Sweet Crude Oil futures for September delivery down $0.04 to close at $95.9701 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $96.53 a barrel intraday and a low of $95.02.
Last week, oil settled at a 3-month high on supply concerns with tension brewing in the Middle East after Saudi Arabia advised its citizens to get out of Lebanon and Israel indicating its willingness to strike Iran's nuclear facilities. Oil prices were also supported by a dollar that traded lower against most major currencies.
The euro traded lower against the dollar at $1.2345 on Monday, as compared to $1.2353 late Friday in North America. The euro scaled a high of $1.2370 intraday and a low of $1.2296.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.48 on Monday, down from 82.54 in North American trade late Friday. The dollar scaled a high of 82.72 intraday and a low of 82.38.
The dollar dropped against most major currencies but continued to trade marginally higher against the euro, after comments from the German central bank on ECB's yield cap plans. Nonetheless, investors continued to weigh some recent upbeat economic data, which have also thinned hopes of further quantitative easing from the U.S. Federal Reserve.
Germany's central bank on Monday reiterated its opposition to the European Central Bank's plan to purchase government bonds. Bundesbank said in its monthly report said the decision to share solvency risks should be taken by governments and not by central banks. The comments came after a German magazine reported that the European Central Bank may be planning to cap yields.
As a result of the ECB's comments, top European shares moved higher, while Spanish and Italian 10-year bond yields declined notably today.
Meanwhile, Greek Prime Minister Antonis Samaras is expected to meet some of the leaders of the euro currency bloc this week to request an extension of its fiscal consolidation program, reports said over the weekend. Samaras will be visiting Luxembourg Prime Minister Jean-Claude Juncker, who heads the group of euro-area finance ministers, by the middle of this week. He will also meet with German Chancellor Angela Merkel and French President Francois Hollande this week. Samaras is expected to put forward a request for a two-year extension for the country's fiscal adjustment program.
In economic news, eurozone construction output declined for the third consecutive month in June, Eurostat reported. In the construction sector, seasonally adjusted production dropped 0.5 percent from a month ago, when it fell 0.2 percent. Building construction was down 0.1 percent after staying flat in May. Likewise, civil engineering fell by 0.7 percent compared to a 0.5 percent rise in the prior month
During the week, investor focus will be on the weekly jobless claims report, the Commerce Department's durable goods orders report for July and the minutes of the latest FOMC minutes, apart from a trio of housing reports on new home sales, existing home sales and house prices, which have the potential to move the markets.
Focus will also be on the crude oil inventories data from the API due Tuesday and the Energy Information Administration weekly report due Wednesday.
by RTT Staff Writer
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