U.S. crude oil dropped, but still ended just above $90 a barrel Friday, on demand growth concerns, while tracking declining global equity markets after automatic budget cuts in the U.S. came into effect last week and on China worries. Oil prices were also impacted by developments in the eurozone, with no sight of a political solution in Italy, and as well on production problems in Libya and a pipeline system closure in the North Sea.
Chinese stocks plummeted 3.7 percent at the Shanghai Composite Index, driven mostly by property and construction sectors, with the government making efforts to contain spiraling home prices with new measures on property buying. The Shanghai Composite Index was at its lowest since August 2011.
Light Sweet Crude Oil futures for April delivery, the most actively traded contract, dropped $0.56 or 0.6 percent, to close at $90.12 a barrel on the New York Mercantile Exchange Monday.
Crude prices for April delivery scaled a high of $90.91 a barrel intraday and a low of $89.33.
Last week oil ended lower on demand growth concerns after some weak manufacturing data out of China, the world's second largest energy user. Oil prices were also impacted by a strong dollar, while the euro gained.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.19 on Monday, down from 82.28 late Friday in North American trade. The dollar scaled a high of 82.47 intraday and a low of 82.23.
The euro traded higher against the dollar at $1.3027 on Monday, as compared to $1.3014 late Friday in North America. The euro scaled a high of $1.3031 intraday and a low of $1.2984.
In economic news, eurozone producer price inflation slowed to 1.9 percent in January as expected by economists, Eurostat reported. The annual rate fell from 2.1 percent in the prior month. Month-on-month, producer prices were up 0.6 percent, reversing a 0.2 percent drop in December. Excluding energy prices, euro area producer price inflation fell to 1.4 percent from 1.6 percent.
Meanwhile, data released by the think-tank Sentix showed that eurozone investor confidence declined in March after improving for six months in a row. The index fell to -10.6 in March, the weakest since December 2012, from -3.9 in the prior month. The March figure was worse-than the expected level of -4.6 points.
The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index for U.K. dropped to 46.8 in February from 48.7 in January. Economists had forecast the index to rise to 49. Readings below 50 suggests contraction of the sector. The British construction activity declined at the sharpest pace since October 2009 on solid reduction in output and new works, the Markit Economics survey showed.
China's non-manufacturing sector growth eased to a five-month low in February, a report by the China Federation of Logistics and Purchasing said Sunday. The official Purchasing Managers' Index fell to 54.5 in February from 56.2 in January.
by RTT Staff Writer
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