Crude Oil Ends Lower On Supply Glut Concerns

(RTTNews) - U.S. crude oil dropped for a fifth straight session to end at a five-week low Monday, on concerns of a supply glut with expectations of Libyan oil production and export returning to normal, even as the dollar weakened against a basket of major currencies.

Speculation of South Sudan increasing its oil production and export also pushed oil prices lower. Prices leveled off from a 2-month high in the previous week, with investors awaiting fresh triggers.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, dropped $0.53 or 0.6 percent to close at $93.43 a barrel on the New York Mercantile Exchange Friday.

Crude prices for February delivery scaled a high of $94.59 a barrel intraday and a low of $93.20.

Last week, crude retreated from its 2-month high, losing 6 percent, even after an official weekly oil report showed larger-than-expected drop in U.S. crude inventories.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.64 on Monday, down from its previous close of 80.87 late Friday in North American trade. The dollar scaled a high of 80.91 intraday and a low of 80.54.

The euro traded higher against the dollar at $1.3645 on Monday, as compared to its previous close of $1.3593 late Friday in North America. The euro scaled a high of $1.3653 intraday and a low of $1.3572.

In economic news from the U.S., activity in the U.S. service sector unexpectedly grew at a slower rate in December, a report from the Institute for Supply Management showed Monday. The ISM non-manufacturing index edged down to 53.0 in December from 53.9 in November, although a reading above 50 still indicates growth in the service sector. The index dropped to its lowest level since hitting 52.8 in June. Economists expected the index at a reading of 54.8.

A Commerce Department report on Monday showed new orders for U.S. manufactured goods rose slightly more than expected in November, with orders for transportation equipment showing a notable rebound. Factory orders increased 1.8 percent in November following a revised 0.5 percent decrease in October. Economists expected orders to rise by 1.6 percent compared to the 0.9 percent drop reported for the previous month.

China's service sector growth slowed in December to the weakest level since August 2011 as new work inflow weakened, a survey by Markit Economics and HSBC showed. The headline services business activity index came in at 50.9 in December, down from 52.5 in November. An index reading above 50 indicates expansion while a reading below 50 suggests contraction.

From the eurozone, German private sector growth slowed more than estimated initially in December, detailed results of a survey by Markit Economics showed. The headline composite output index, that measures combined performance of the country's manufacturing and services industries, fell to 55 in December from 55.4 in November.

Germany's EU harmonized inflation weakened more-than-expected in December, latest data revealed. The harmonized index of consumer prices increased 1.2 percent in December from the corresponding month last year, following a 1.6 percent gain in November. Economists anticipated 1.4 percent growth for December.

Eurozone investor confidence improved sharply in January to its highest since April 2011, a monthly survey by the think tank Sentix showed. The sentiment index rose 3.9 points to 11.9 in January. In Germany, investor sentiment rose to 32.4 in January from 32.1 a month ago.

Meanwhile, eurozone private sector growth accelerated as estimated in December, supported by strong performance of the manufacturing sector, final data from Markit Economics revealed. The seasonally adjusted composite output index, which measures performance of manufacturing and service sectors, rose to a three-month high of 52.1 in December from 51.7 in November. The outcome matched the flash estimates.