Crude Oil Ends Lower Ahead Of Inventory Data, Fed Concerns

(RTTNews) - U.S. crude oil ended sharply lower on Tuesday, ahead of the weekly inventory report with investors tracking declining global equity markets after uncertainties over the U.S. Federal Reserve's plans for scaling down its quantitative easing program continued to unnerve markets. Investor sentiments over the timing of the Fed tapering its monetary stimulus program worsened after a slew of recent upbeat macroeconomic data.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $1.26 or 1.2 percent to close at $105.30 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for September delivery scaled a high of $107.27 a barrel intraday and a low of $104.86.

Yesterday, oil settled marginally lower after Libya announced plans to increase output next month and as the dollar strengthened against a basket of select currencies.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.66 on Tuesday, down from 81.86 late Monday in North American trade. The dollar scaled a high of 81.96 intraday and a low of 81.51.

The euro traded higher against the dollar at $1.3299 on Tuesday, as compared to $1.3258 late Monday in North America. The euro scaled a high of $1.3322 intraday and a low of $1.3247.

From the U.S., the Commerce Department said the country's trade deficit narrowed to $34.2 billion in June from a revised $44.1 billion in May. Economists expected the deficit to narrow to $43.0 billion from the $45.0 billion originally reported for the previous month. The much narrower than expected trade deficit came as the value of exports rose 2.2 percent to $191.2 billion, while the value of imports fell 2.5 percent to $225.4 billion.

From the eurozone, Germany's manufacturing orders increased at a significantly faster rate in June than economists expected, official data showed Tuesday. New orders in the manufacturing sector climbed a seasonally adjusted 3.8 percent sequentially in June, reversing the previous month's revised 0.5 percent decrease. Economists had forecast orders to record a more modest increase of 1 percent, following May's originally recorded 1.3 percent fall.

Meanwhile, U.K. industrial production recovered at a faster than expected pace in June, helped by mining and manufacturing output, the Office for National Statistics said. Industrial output rose 1.1 percent month-on-month in June, following three consecutive periods of zero growth. Economists had forecast output to grow moderately by 0.7 percent.