Crude oil futures extend losses after downbeat U.S. data

Forex Pros – Crude oil futures extended losses on Tuesday, dropping to a fresh three-day low as mounting concerns over a slowdown in U.S. demand weighed on prices, which were also pressured by a stronger U.S. dollar.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD96.22 a barrel during U.S. morning trade, dropping 0.82%.   

It earlier fell by as much as 1.1% to USD95.92 a barrel, the lowest price since May 12.

Earlier in the day, the U.S. Census Bureau said that the number housing starts in April tumbled by 10.6% from a month earlier to a seasonally adjusted 0.52 million, while the number of building permits issued fell by 4% to a seasonally adjusted 0.55 million.

A separate report showed that industrial production in the U.S. was unexpectedly flat last month after rising by a revised 0.7% in March.

Meanwhile, a stronger U.S. dollar also contributed to oil’s weakness. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% to hit 75.88.

Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.

Receding concerns over a disruption to U.S. supplies also weighed on prices after the opening of the key Morganza spillway in Louisiana curbed speculation the Mississippi River will flood refineries and disrupt fuel supplies.

Markets were also looking forward to Wednesday’s government report on U.S. crude inventories, which could show supplies rose to a two-year high last week. The U.S. Energy Department report was expected to show that U.S. crude oil stockpiles increased by 1.5 million barrels to 370.3 million.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery slumped 0.45% to trade at USD109.84 a barrel, up USD13.62 on its U.S. counterpart.




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