U.S. crude oil ended lower Tuesday, as the dollar rebounded to trade higher after comments from Philadelphia Federal Reserve President Charles Plosser dampened investor sentiments. Plosser indicated the Fed may have to raise short-term interest rates before mid-2015 and believes the current round of quantitative easing would not do much for the economy.
Earlier, oil made gains on some upbeat economic data from the U.S., with home prices rising and consumer confidence improving more than expected.
Light Sweet Crude Oil futures for November delivery dropped $0.56 or 0.6 percent to close at $91.37 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices scaled a high of $93.20 a barrel intraday and a low of $91.10.
Yesterday, oil settled at a 6-week low on worries over weak global economic growth after disappointing German data and a strong dollar.
The euro traded higher against the dollar at $1.2950 on Tuesday, as compared to $1.2931 late Monday in North America. The euro scaled a high of $1.2970 intraday and a low of $1.2888.
The dollar made a remarkable come-back to trade higher against major currencies after the Philadelphia Fed President Plosser observed that the current round of quantitative easing would do little to help the economy and the Fed may have to hike short-term interest rates before mid-2015.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.56 on Tuesday, up from 79.54 in North American trade late Monday. The dollar scaled a high of 79.72 intraday and a low of 79.33.
In economic news from the U.S., the Conference Board's report Tuesday showed a much bigger than expected improvement in U.S. consumer confidence in September. The Conference Board's consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists expected the index to climb to 64.8 from the 60.6 originally reported for the previous month.
Meanwhile, a report released by Standard & Poor's showed the S&P/Case-Shiller 20-City Composite Home Price Index rose by 1.2 percent in July compared to the same month a year ago. Home prices improved 1.6% in July, the highest in nearly two years. Economists expected the index to increase by about 1.1 percent year-over-year. S&P's 20-City Composite Home Price Index increased by a seasonally adjusted 0.4 percent on a monthly basis in July compared to a 0.9 percent increase in May.
China's leading economic activity index rose 1.7 percent month-on-month to 240 in August, the fastest pace in seven months. The increase raises hopes of a moderate rebound in growth that slowed to a three-year low in the second quarter. This index increased 0.6 percent in July and 0.1 percent in June.
Elsewhere, Germany's consumer confidence is set to remain unchanged in October, survey results from market research group GfK showed. The forward-looking consumer sentiment index came in at 5.9 in October, unchanged from September and in line with economists' expectations.
Later in the day, the American Petroleum Institute will release its U.S crude oil inventories report for the week-ended September 21, while the Energy Information Administration is scheduled to release its weekly oil report Wednesday.
by RTT Staff Writer
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