Crude Oil Ends Lower Amid Supply-Glut Concerns

(RTTNews) - U.S. crude oil rallied but still ended slightly lower on Monday, amid signs that global supplies are likely to increase significantly even as demand wanes.

Oil futures rallied strongly just before close to pullback much of the losses after some positive trade data from China indicated a definite improvement in the economy, even as the dollar continued to weaken against a select band of major currencies.

Chinese trade surplus declined more than expected in September while exports and imports growth remained strong, official data from China showed Monday.

In its monthly oil market report published Friday, the Organization of the Petroleum Exporting Countries said oil production within the cartel rose 402,000 barrels a day last month to a total 30.47 million barrels a day, the highest level since the summer of 2013.

An announcement of a reduction in oil prices by Iran on Friday, close on the heels of a similar move by Saudi Arabia's Aramco also continued to weigh on oil.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, edged down $0.08 to close at $85.74 a barrel on the New York Mercantile Exchange Monday.

Crude prices for November delivery scaled a high of $85.87 a barrel intraday and a low of $84.07 -- the lowest level since July 2012.

On Friday, crude oil futures ended a shade higher after declining to a low of $83.59 a barrel intraday. While short-covering after three days of losses supported oil, fears of a supply glut and a warning from OPEC about a likely fall in demand limited its rise. The dollar's rise against major currencies also capped oil's upside.

Oil futures shed about 4.4 percent last week, the highest weekly loss since January 2014.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.55 on Monday, down from its previous close of 85.68 late Friday in North American trade. The dollar scaled a high of 85.75 intraday and a low of 85.41.

The euro trended higher against the dollar at $1.2679 on Monday, as compared to its previous close of $1.2631 late Friday in North American trade. The euro scaled a high of $1.2699 intraday and a low of $1.2622.

In economic news, a report from the General Administration of Customs of the People's Republic of China Monday showed China's trade surplus came in at $31 billion in September, less than the $41.41 billion expected by the economists. In August, a surplus of $49.8 billion was recorded. Nonetheless, the surplus for the third quarter was the largest in Chinese history.

China's exports grew 15.3 percent year-over-year in September, faster than the 12 percent rise expected by economists. In August, exports had increased 9.4 percent. Imports recovered by 7 percent, defying expectations for a 2 percent decline. In August, imports had dropped 2.4 percent.

Meanwhile, People's Bank of China Governor Zhou Xiaochuan in a statement said China's employment situation is better than expected and inflation stabilized at a low level. Xiaochuan indicated the bank will continue to implement prudent monetary policy.

Among data awaited later this week are the U.S. Commerce Department's retail sales and housing starts reports for September, as well as manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve.

Also on focus are the weekly jobless claims data, the housing market index, the preliminary consumer sentiment survey for November, besides the producer prices index and the business inventories report.

Among the economic data due this week are the U.S. Commerce Department's retail sales and housing starts reports for September and the results of the November manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve.

Also due are the weekly jobless claims data, the housing market index, the preliminary consumer sentiment survey for November, besides the producer prices index and the business inventories report.