News Column

Crude Oil Ends Higher As Supply Concerns Persist

July 14, 2014

WASHINGTON (Alliance News) - US crude oil rallied to end a tad higher on Monday, after tumbling over two % in the last session, on reports of some renewed violence in Iraq and Libya. Oil prices fluctuated through the day, even as fears of supply disruption from the Middle East continued to ease with Libya all set to up its oil exports.

Last week crude oil futures shed about 3.1%, down for a fourth straight week. Concerns of disruption in crude supplies from Libya eased after rebels controlling some vital oil terminals agreed to give up control of the facilities which have remained closed for about a year. Libya is expected to ship about 0.5 million barrels of crude per day.

Indications the Iraqi conflict will likely remain confined to north of the country also pulled oil prices lower. However, car bombings in Iraq killed at least seven people, a day after gunmen killed 33 in a raid on a housing complex near Baghdad.

With some heavy fighting reported between rival groups near Tripoli airport in Libya, there are renewed fears that supplies may take longer to come back online.

Meanwhile, investors continued to tread cautiously ahead of a slew of economic data and Fed comments due later this week.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, edged up USD0.08 to close at USD100.91 a barrel on the New York Mercantile Exchange Monday.

Crude prices for August delivery scaled a high of USD100.99 a barrel intraday and a low of USD100.22.

On Friday, crude oil plummeted to end at a more than two-month low on waning concerns over supply disruptions from the Middle East with indications of production in Iraq and Libya all set to return to normal. Crude oil shed about 3.1% for the week, down for a fourth straight week.

The dollar index, which tracks the US unit against six major currencies, traded at 80.20 on Monday, up from its previous close of 80.19 late Friday in North American trade. The dollar scaled a high of 80.25 intraday and a low of 80.08.

The euro traded higher against the dollar at USD1.3611 on Monday, as compared to its previous close of USD1.3599 late Friday in North American trade. The euro scaled a high of USD1.3640 intraday and a low of USD1.3598.

In economic news from eurozone, data from Eurostat showed eurozone industrial production to have declined 1.1% month-on-month in May, reversing the 0.7% rise in April. Economists expected output to drop 1.2%.

U.K 's business optimism was highest among developed nations in June amid weakening global sentiment. Business confidence in the UK, in terms of expected future activity, employment and investment, came in highest among the the G4 economies, though the measure eased from February's record high, a Markit Global Business Outlook survey showed.

Elsewhere, China's fiscal expenditure grew significantly in June as government increased spending to boost economic growth, data from the finance ministry showed Monday. Fiscal expenditure advanced sharply by 26.1% from a year ago to CNY 1.65 trillion in June. The annual growth was faster than the 24.6% increase seen in May. Fiscal revenues increased only 8.8% to CNY 1.3 trillion. In May, income was up 7.2%.

Japan's industrial output growth for May was revised upwards, final figures from the Ministry of Economy, Trade and Industry showed Monday. Final industrial production rose 0.7% month-on-month in May, which was more than the 0.5% increase estimated in the preliminary report on June 29. In April, production grew 2.8%.

During the week, investors will be digesting a slew of economic reports including the data on consumer sentiment, retail sales, manufacturing sector activity and housing market, besides the weekly report on jobless claims.

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Source: Alliance News

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