U.S. crude oil futures pared some of the losses in late trading but still settled lower Monday, on demand concerns and a strong dollar that continued to gain against most major currencies. Investors also weighed the upcoming European Union summit meeting later in the week with little or no hopes of any resolution to the eurozone debt problems.
In the meantime, concerns of tropical storm Debby hitting the oil producing states of Louisiana and Texas died down after meteorological experts indicated the storm had changed course.
Light Sweet Crude Oil futures for August delivery, dropped $0.55 or 0.7 percent to close at $79.21 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $80.68 a barrel intraday and a low of $78.03.
Last week, oil prices plunged over 5 percent to settle at a near nine-month low on some weak economic data from China and U.S., even as the dollar strengthened. Prices were also impacted by the more-than-expected increase in U.S. crude oil stockpile last week. Investor sentiments were at a low after the Federal Reserve failed to provide any monetary stimulus measures, which were widely expected this time.
Even as global equity markets slumped on eurozone concerns, the dollar continued its strong run against the euro and other major currencies. Investors stayed away from riskier assets with little or no hopes for any lasting solution to the eurozone debt problem, ahead of the European Union summit meet Thursday.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 82.540 on Monday, up from 82.267 in North American trade late Friday. The dollar scaled a high of 81.63 intraday and a low of 82.32.
The euro traded lower against the dollar at $1.2482 on Monday, as compared to $1.2564 late Friday. The euro scaled a high of $1.2558 intraday and a low of 1.2472.
In economic news, new home sales in the U.S. rose by more than expected in May, the strongest since April of 2010, data from the Commerce Department on showed. Sales of new single-family homes at a seasonally adjusted annual rate was 369,000 in May, a 7.6 percent increase from the revised April rate of 343,000. Economists expected new home sales to climb to 350,000.
In the week ahead, investors will focus on the Commerce Department's new homes sales report for May, the National Association of Realtors' pending home sales index for May, the Conference Board's consumer confidence index for June and the weekly jobless claims data, the results of the ISM-Chicago's manufacturing survey for June, the Commerce Department's personal income and spending report for May and the durable goods orders report for May.
Focus this week will also be on crude oil inventories data from the American Petroleum Institute due Tuesday and the Energy Information Administration report due Wednesday.
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