Crude Oil Plunges To End Below $58 As Dollar Soars

(RTTNews) - U.S. crude oil plunged to end sharply lower for a fifth straight session on Tuesday, as the dollar soared against some major currencies, rebounding on comments from European Central Bank officials. This is the lowest close for the month.

ECB executive board member Benoit Coeure said the central bank will "frontload" its asset purchases in May and June to offset a lack of liquidity in the summer months. ECB governing council member Christian Noyer also suggested that the ECB may extend quantitative easing if necessary.

"The Eurosystem is ready to go further if necessary to deliver on its mandate of maintaining inflation close to but below 2%," Noyer stated.

Crude oil has been bouncing back and forth around $60 a barrel for the past week.

Nonetheless, fighting in Iraq, where ISIS is gaining a strong foothold, put a floor under oil prices. Markets fear an escalation of the conflicts in Iraq and Yemen could interrupt supplies from the region, although any recovery in U.S. shale production could limit gains.

Meanwhile, Saudi Arabia's crude output continues to grow despite the supply glut in global markets, even as the U.S. and OPEC fight for a larger market share.

Saudi Arabia's crude production reached 10.3 million barrels per day in March, more than the prior record 10.2 million barrels per day output in August 2013. Saudi Arabia crude export was about 8 million barrels per day during the month.

OPEC output in April increased by 160,000 barrels per day from an upward revised 960,000 barrels per day gain in March. OPEC output for for April was in excess of 31.2 million barrels per day, the highest since September 2012.

Light Sweet Crude Oil futures for June delivery, plunged $2.17 or 3.7 percent, to settle at $57.26 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for June delivery scaled a high of $59.63 a barrel intraday and a low of $57.09.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, plummeted $2.25 or 3.7 percent, to settle at $57.99 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for July delivery scaled a high of $60.42 a barrel intraday and a low of $57.93.

On Tuesday, crude oil for July delivery dropped $0.30 or 0.4 percent, to settle at $60.24 a barrel, as the dollar trended higher and on renewed fierce fighting in Iraq and Yemen with concerns over supply disruption from the region resurfacing once again.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.26 on Tuesday, up from its previous close of 94.16 on Monday in late North American trade. The dollar scaled a high of 95.47 intraday and a low of 94.09.

The euro trended lower against the dollar at $1.1154 on Tuesday, as compared to its previous close of $1.1317 in North American trade late Monday. The euro scaled a high of $1.1327 intraday and a low of $1.1120.

On the economic front, new residential construction in the U.S. increased significantly in April, a report from the Commerce Department showed Tuesday, with housing starts jumping to their highest level in over seven years.

The report said housing starts surged up 20.2 percent to an annual rate of 1.135 million in April from the revised March estimate of 944,000. Economists expected housing starts to climb to a rate of 1.029 million from the 926,000 originally reported for the previous month.

The Commerce Department also said building permits increased 10.1 percent to an annual rate of 1.143 million in April from the revised March rate of 1.038 million. Building permits, an indicator of future housing demand, had been expected to climb to 1.070 million from the 1.039 million originally reported for the previous month.

German economic sentiment declined more-than-expected to a 5-month low in May, as the lackluster first quarter growth figure weighed on economic outlook, survey results from the Mannheim-based Centre for European Economic Research, or ZEW, showed Tuesday.

The ZEW Indicator of Economic Sentiment fell sharply to 41.9 from 53.3 in April. This was the lowest reading since December 2014. Economists had forecast a much smaller drop in the index to 49.

The number of persons in employment in Germany continued to increase in the first quarter, albeit at a slower pace, preliminary figures from Destatis showed Tuesday. Total number of employed persons in the country rose 0.7 percent, or by 275,000 persons, to 42.4 million in the first quarter from the corresponding period last year. In the fourth quarter, the increase was 0.9 percent.

Eurozone merchandise trade surplus increased notably in March from a year ago, as exports grew faster than imports, preliminary figures from Eurostat showed Tuesday. The unadjusted trade surplus advanced to EUR 23.4 billion in March from EUR 16.1 billion in the same month of the previous year.

Eurozone annual inflation remained flat in April as initially estimated after falling for four straight months, final data published by Eurostat showed Tuesday. Harmonized consumer prices fell 0.1 percent in March and 0.3 percent in February. The European Central Bank targets inflation below, but close to, 2 percent over the medium term.

U.K. inflation unexpectedly turned negative for the first time since 1960 on falling food and transport costs, official data showed Tuesday. Factory gate prices continued its downward trend reflecting lower crude prices.

Data from the Office for National Statistics showed that consumer prices fell 0.1 percent in April from last year, while it was forecast to remain flat as seen in March. This was the first annual fall since the official series started in 1996. Based on the comparable estimates, it was the first drop since 1960.

House price inflation in the U.K accelerated notably in March, after easing in the previous five months, the Office for the National Statistics said Tuesday. Average house prices climbed 9.6 percent year-over-year in March, faster than February's 7.4 percent growth, which was revised from a 7.2 percent rise estimated earlier.