U.S. crude oil dropped dramatically in the last few minutes of regular trade to end sharply lower Monday, amid rumors of oil release from the Strategic Petroleum Reserve after prices galloped following the Federal Reserve announcement of additional quantitative easing measures last week. Oil was trading modestly higher for much of the day, before shedding gains in the last 30 minutes to close.
Light Sweet Crude Oil futures for October delivery plunged $2.38 or 2.4 percent to close at $96.62 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $99.52 a barrel intraday and a low of $94.65.
Last week, oil prices rose 2.7 percent to hit a four-month high after the U.S. Federal Reserve's additional quantitative easing measures to stimulate growth in the world's largest economy. Prices were also supported by increasing tensions in the Middle East, with the U.S. Ambassador to Libya killed and protests spreading to more locations in the Arab world targeting the U.S.
The euro traded lower against the dollar at $1.3107 on Monday, as compared to $1.3122 late Friday in North America. The euro scaled a high of $1.3171 intraday and a low of $1.3084.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.00 on Monday, up from 78.84 in North American trade late Friday. The dollar scaled a high of 79.04 intraday and a low of 78.72.
In economic news from the U.S., the Federal Reserve Bank of New York said its general business conditions index dropped to a negative 10.41 in September from a negative 5.85 in August, with a negative reading indicating a contraction in regional manufacturing activity. Economists expected the index to a negative 2.0.
Elsewhere, the eurozone trade surplus rose to 15.6 billion euro in July from 13.6 billion euro in June, Eurostat said. In July 2011, the trade surplus totaled 2.1 billion euro. Exports dropped 2 percent month-on-month in July after rising 2.4 percent in June. Likewise, imports fell 1.2 percent, reversing last month's 0.7 percent rise.
From the U.K., house prices dropped for a second consecutive month in August, recording the biggest-ever fall for the month as home buyers disengaged themselves from property search during key Olympic events. New sellers' reduced asking prices by an average 2.4 percent from a month earlier to GBP236,260 in August, Rightmove said Monday. This followed a 1.7 percent dip in July and was the the largest August fall Rightmove has ever recorded.
During this week, focus will be on the National Association of Home Builders' housing market index for September, the National Association of Realtors' existing home sales report, the Commerce Department's housing starts report for August and results of the regional manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve.
Also, focus will be on the crude oil inventories data from the American Petroleum Institute and the Energy Information Administration.
by RTT Staff Writer
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