U.S. crude oil ended lower for a fourth straight session Monday, on supply glut worries and demand growth concerns after global equity markets deeply in the red, with the Shanghai stock market plummeting over 8 percent.
The drop comes even as the U.S. dollar slipped against most major currencies, with investors playing it cautious ahead of the Federal Reserve policy meet outcome later this week.
Crude oil prices came under pressure amid speculation that Iran oil will flow into global markets during a global supply glut, even as U.S. supplies are expected to rise. Data from Baker Hughes Inc. showed the number of U.S. rigs actively drilling for oil rose by 21 units to 659 rigs as on July 24.
Investors were concerned over some weak performance of the Chinese stock market, with the Shanghai stock exchange declining a near 8.5 percent for a second straight session of losses. This is the worst daily percentage decline since February 27, 2007.
Markets in Europe also ended firmly in negative territory on Monday, while the U.S. markets are also under pressure.
In economic news, a Commerce Department report on Monday showed durable goods orders in the U.S. rebounded strongly in June, after reporting a sharp drop in new orders for manufactured durable goods in the previous month.
The Federal Reserve headlines the economic events of the unfolding week, as traders expect policy makers to at least drop a hint at whether there would be a rate hike within the end of the year.
Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $0.75 or 1.6 percent, to settle at $47.39 a barrel on the New York Mercantile Exchange Monday.
Crude prices for September delivery scaled a high of $48.20 a barrel intraday and a low of $47.20.
On Friday, crude oil futures for September delivery fell $0.31 or 0.6 percent, to settle at $48.14 a barrel, on supply glut worries and demand growth concerns after some disappointing economic data from China. Crude oil futures shed about 5.4 percent last week.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.48 on Monday, down from its previous close of 97.26 in late North American trade on Friday. The dollar scaled a high of 97.29 intraday and a low of 96.29.
The euro trended higher against the dollar at $1.1097 on Monday, as compared to its previous close of $1.0985 in North American trade late Friday. The euro scaled a high of $1.1128 intraday and a low of $1.0971.
On the economic front, a Commerce Department report on Monday showed new orders for U.S. manufactured durable goods to have jumped 3.4 percent in June following a revised 2.1 percent decrease in May. Economists expected orders to increase by 3.1 percent compared to the 2.2 percent drop reported for the previous month.
Germany’s business morale unexpectedly improved in July after concerns due to the uncertainty regarding Greece and its future in euro eased, results of a key survey revealed Monday.
The Ifo Business Climate Index for German trade and industry rose to 108 from June’s revised 107.5, a four month-low. Economists expected the measure to edge up a point from June’s 107.4 original score.
Germany’s import prices declined at a faster-than-expected pace in June, data from Destatis showed Monday. Import prices slid 1.4 percent year-over-year in June, just above economists’ expectations for a 1.3 percent decrease. In May, prices had fallen 0.8 percent.
U.K. factory order growth slowed in July to its lowest level in two years, as a strong sterling and weak global conditions weighed on the export outlook, survey data from the Confederation of British Industry showed Monday. The total order book balance dropped to -10 percent in July, which was the lowest since July 2013 when it was -12 percent. Economists expected a balance figure of -7.
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