WASHINGTON (Alliance News) - US crude oil dropped sharply to end at a two-month low on Tuesday, ahead of the official US crude stockpile data, on sustained selling pressure amid expectations of a global supply glut even as supply disruption from Iraq eased.
Reports of escalating violence in key oil producing regions of the Middle East failed to give prices much support. Fighting between rival militias over Tripoli International Airport could spiral into larger problems for Libya's fragile government just as crude shipments were set to resume from some major ports.
US Federal Reserve Chairman Janet Yellen told the Senate Committee on Banking, Housing, and Urban Affairs that the central bank may raise interest rates sooner than earlier forecast if improvements in the US labor market are sustained.
Later today, the American Petroleum Institute will release its weekly oil report, with the official crude oil inventories data from the US Energy Information Administration due Wednesday.
Light Sweet Crude Oil futures for August delivery, the most actively traded contract, dropped USD0.95 or 0.9% to close at USD99.96 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices for August delivery scaled a high of USD101.06 a barrel intraday and a low of USD99.01.
The dollar index, which tracks the US unit against six major currencies, traded at 80.38 on Tuesday, up from its previous close of 80.17 late Monday in North American trade. The dollar scaled a high of 80.41 intraday and a low of 80.14.
The euro traded lower against the dollar at USD1.3569 on Tuesday, as compared to its previous close of USD1.3619 late Monday in North American trade. The euro scaled a high of USD1.3630 intraday and a low of USD1.3562.
In economic news from the US, a report from the Commerce Department showed US retail sales to have risen by a less than expected 0.2% in June, following an upwardly revised 0.5% rise in May. Economists had expected sales to climb by 0.6% compared to the 0.3% growth originally reported for the previous month.
A separate report from the New York Federal Reserve showed that business conditions for New York manufacturers improved significantly for a third consecutive month in July, with the index of regional manufacturing activity reaching its highest level in more than four years. The New York Fed's general business conditions index climbed to 25.6 in July from 19.3 in June, with a positive reading indicating growth in regional manufacturing activity. Economists expected the index to drop to a reading of 17.0.
Business inventories in the US rose slightly less than expected in May, a report from the Commerce Department revealed Tuesday. Business inventories climbed 0.5% in May following a 0.6% increase in April. Economists expected inventories to increase by another 0.6%.
Meanwhile, import prices in the US rose less than expected in June, a report from the Labor Department showed Tuesday, even as export prices dropped unexpectedly.
The Labor Department said import prices ticked up by 0.1% in June after rising by an upwardly revised 0.3% in May. Economists expected import prices to climb by 0.4% compared to the 0.1% uptick originally reported for the previous month.
Export prices in the US dropped 0.4% in June after edging up 0.1% in May. Economists expected export prices to rise by 0.2%.
From Europe, Germany's economic confidence weakened for the seventh consecutive month to a 19-month low in July, a survey by the Mannheim-based Centre for European Economic Research/ZEW showed Tuesday. The indicator of economic sentiment dropped to 27.1 in July from 29.8 in June. This was the lowest since December 2012 when the reading was 29.8. It was expected to fall to 28.2.
UK inflation accelerated more-than-expected in June to the highest since last December, with consumer prices rising 1.9% in June from last year, the Office for National Statistics said Tuesday. Inflation was forecast to rise moderately to 1.6% from 1.5% in May.