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Crude falls on soft housing data, global supply concerns

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Investing.com -

Investing.com - Disappointing U.S. housing data coupled with ongoing concerns that the global economy is awash in crude while demand remains soft sent oil futures falling on Monday.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in November traded down 1.06% at $90.68 a barrel during U.S. trading. New York-traded oil futures hit a session low of $90.426 a barrel and a high of $91.92 a barrel.

The November contract settled down 0.36% at $91.65 a barrel on Friday.

Nymex oil futures were likely to find support at $89.76 a barrel, the low from Sept. 15, and resistance at $94.12 a barrel, last Tuesday's high.

The National Association of Realtors reported earlier that existing home sales in the U.S. unexpectedly fell 1.8% to an annual unit rate of 5.05 million in August.

Analysts had expected existing home sales to rise 1% to 5.20 million units, and the figures sent oil prices falling on fears that U.S. recovery continues to face headwinds and may consume less fuel and energy than once thought.

Concerns that global oil supply is outstripping demand also battered crude futures.

While the U.S. economy is gaining steam despite hiccups here and there, Europe and China are still battling potholes, which has taken its toll on energy markets.

European Central Bank President Mario Draghi said earlier that economic activity in the euro area has slowed and added he saw risks of a further downturn.

"The economic recovery in the euro area is losing momentum. Following some moderate expansion in recent quarters, growth of the euro area real GDP came to a halt in the second quarter of this year," Draghi said in prepared remarks of his speech.

"The early information on economic conditions which we received over the summer has been somewhat weaker than expected. While industrial production and manufacturing orders in July gave some reason for optimism, more recent survey indicators have given no indication that the sharp decline registered in August has stopped."

Separately, on the ICE Futures Exchange in London, Brent oil futures for November delivery were down 1.72% at US$96.70 a barrel, while the spread between Brent and U.S. crude contracts stood at US$6.02 a barrel.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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