U.S. crude oil futures plunged to settle at a five-month low Monday, on demand growth concerns over the Greece political imbroglio, and fears the country may be heading out of the eurozone. Investors, meanwhile, continued to find safe haven in the dollar as the greenback continued to ride high against most major currencies.
Oil prices also came under pressure after the Saudi Arabian Oil Minister Ali al-Naimi observed that oil prices were too high and the European benchmark Brent crude should be trading at around $100 a barrel. Al-Naimi further expects crude oil stocks to increase globally with the higher seasonal demand beginning July.
Light Sweet Crude Oil futures for June delivery, dropped $1.35 or 1.4 percent to close at $94.78 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $95.83 a barrel intraday and a low of $93.65.
Last week, crude oil shed about 2.4 percent to end at a 5-month low on demand growth concerns across Europe in light of the eurozone financial crisis following the changed political scenario.
Markets were also rattled by both the Spanish and Italian bond yields, which continued to move higher. The Spanish benchmark 10-year yield jumped to 6.25 percent, above the 6 percent mark which analysts consider unsustainable. In Italy, the country's 10-year bond yield soared to 5.75 percent.
The U.S. dollar was steady near its 4-month high versus the euro. The euro was trading lower against the dollar at $1.2846 on Monday, as compared to $1.2920 late Friday. The euro scaled a high of $1.2904 intraday and a low of 1.2826.
The dollar index, which tracks the U.S. unit against six major currencies, was trading higher at 80.587 on Monday, from 80.296 in North American trade late Friday. The dollar scaled a high of 80.69 intraday and a low of 80.36.
In economic news, eurozone industrial production declined unexpectedly in March, details from Eurostat showed. Industrial production fell 0.3 percent month-on-month in March, against economists' forecast for a 0.4 percent increase. This followed a 0.8 percent rise in February.
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