Crude Oil Ends Lower Ahead Of Supply Data, Strong Dollar

(RTTNews) - U.S. crude oil futures pared losses but still ended lower Tuesday, on demand growth concerns while tracking sharply declining global equity markets and ahead of the weekly crude inventory data amid worries supplies will outstrip demand.

Crude oil futures tumbled ahead of the closely-watched U.S. inventories data from the Energy Information Administration due Wednesday which is expected to show a second straight week of decline. The American Petroleum Institute will report its crude oil inventory report later today.

Investor are looking for indications that U.S. producers are scaling back production amid the ongoing price war initiated by Organization of the Petroleum Exporting Countries.

Meanwhile, global equity markets tumbled after commodity prices plummeted on a strengthening dollar, with crude oil prices leading the plunge. A weaker dollar tends to encourage buying in dollar-priced commodities as it makes them cheaper to holders of other currencies.

U.S. stock markets were in a steep decline with the major averages stuck firmly in the red. The Dow is currently down 1.4 percent, the Nasdaq is down 1.9 percent, and the S&P 500 is trending lower by 2.0 percent.

In Europe, the Stoxx 600 index of eurozone blue-chip stocks dropped 3.0 percent, Germany's DAX dropped 3.8 percent and the French CAC 40 fell 3.4 percent. The U.K.'s FTSE declined 3.3 percent and the Swiss SMI ended lower by 3.49 percent.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, dropped $0.60 or 1.3 percent, to settle at $46.36 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for November delivery scaled a high of $46.74 a barrel intraday and a low of $45.37.

Light Sweet Crude Oil futures for October delivery, dropped $0.85 or 1.8 percent, to settle at $45.83 a barrel on the New York Mercantile Exchange Tuesday. Crude prices for October delivery scaled a high of $46.48 a barrel intraday and a low of $45.14.

On Monday, crude oil jumped $1.89 or 3.2 percent, to settle at $46.68 a barrel, on concerns over declining domestic production and rig counts dropping for the last three weeks.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.28 on Tuesday, up from its previous close of 95.93 in late North American trade on Monday. The dollar scaled a high of 96.40 intraday and a low of 95.76.

The euro trended lower against the dollar at 1.1132 on Tuesday, as compared to its previous close of 1.1191 in North American trade late Monday. The euro scaled a high of 1.1209 intraday and a low of 1.1114.

On the economic front, a leading economic index for the Chinese economy advanced sharply in August, the latest survey from the Conference Board showed on Tuesday. The index advanced 1.0 percent, following the 0.9 percent increase in July and the 0.5 percent gain in June.

Germany's real wages grew at its fastest pace on record in the second quarter, data from Destatis revealed Tuesday. Real wages advanced 2.7 percent in the second quarter from last year, and was the fastest growth since the series began in 2008. Wages increased 2.5 percent in the first quarter.

U.K. budget balance showed its biggest shortfall for August in three years as tax revenue declined from last year, data from the Office for National Statistics showed Tuesday. Public sector net borrowing excluding public sector banks increased by GBP 1.4 billion from last year to GBP 12.1 billion in August.

This was the largest deficit for August since 2012. Economists had forecast the deficit to widen to GBP 9.2 billion.