Crude Oil Ends Lower As Shutdown Deadline Draws Closer

(RTTNews) - U.S. crude oil pared losses but still ended lower Friday, on increasing concerns of a possible U.S. government shutdown over the budget and debt ceiling impasse, even as the dollar weakened against a basket of major currencies. Investor anxiety rose with the deadline drawing closer, and the onus on Congress to pass a short-term budget by midnight Monday to keep the government open.

Oil prices lost 4.9 percent for the month, but were up 6 percent on the quarter.

The stalemate over the federal budget continued with the Senate rejecting the bill passed by the Republican-run House of Representatives. The House passed a measure that would fund the government until the middle of December, conditional on a one-year delay in the implementation of health care reform.

Senate Democrats and the Obama Administration have vowed to fight any obstruction to the Affordable Care Act, the healthcare initiative known as Obamacare.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, dropped $0.54 or 0.5 percent to close at $102.33 a barrel on the New York Mercantile Exchange Monday.

Crude prices for November delivery scaled a high of $102.54 a barrel intraday and a low of $101.05.

Last week, oil shed nearly 2 percent to settle at a near two-month low, with easing geopolitical tensions in the Middle East and on the progress in Iran and the U.S. talks over nuclear weapons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.18 on Monday, down from 80.27 late Friday in North American trade. The dollar scaled a high of 80.38 intraday and a low of 80.03.

The euro traded higher against the dollar at $1.3527 on Monday, as compared to its previous close of $1.3493 late Friday in North America. The euro scaled a high of $1.3555 intraday and a low of $1.3478.

In economic news from the U.S., manufacturing activity in the Chicago-area picked up in September, as factories continued to report increases in new orders. The headline index of the Chicago Purchasing Managers report, an important gauge of manufacturing in the Midwest, advanced to 55.7 in September from August's 53.0 reading. Economists expected a smaller rise of the index at 54.0.

An indicator of manufacturing activity in China, the headline purchasing managers' index edged up to 50.2 in September from 50.1 in August, according to the final outcome of a survey by HSBC and Markit Economics. The reading was below the flash reading of 51.2. A PMI reading above 50, however, indicates expansion of the sector.

Elsewhere, eurozone inflation slowed more than expected to 1.1 percent in September, the lowest since February 2010, from 1.3 percent in August, preliminary data from Eurostat showed. It was forecast to slow to 1.2 percent. Final data for September consumer prices are due on October 16.

Germany's retail sales increased less than forecast by economists in August, data from the Federal Statistical Office revealed. Retail sales grew 0.5 percent month-on-month on a seasonally and working day adjusted basis in August. This was weaker than the 0.7 percent growth expected.