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Crude tanks on supply concerns, ignores U.S. data

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Shutterstock photo - - Oil prices carried Monday's selloff into Tuesday as investors ignored upbeat U.S. data, ditching the commodity on perceptions that the global market is awash in crude at a time geopolitical pressures are waning.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in October traded down 1.06% at $92.76 a barrel during U.S. trading. New York-traded oil futures hit a session low of $92.65 a barrel and a high of $94.37 a barrel.

The October contract settled down 1.65% at $93.75 a barrel on Monday.

Nymex oil futures were likely to find support at $91.43 a barrel, the low from Jan.13 , and resistance at $95.14 a barrel, Monday's high.

Despite concerns that violence could flare up anew in Ukraine or Iraq and threaten global crude shipments, oil prices dropped on fears supply levels remain well above what's needed to meet worldwide demand.

Iraqi and Kurdish forces have taken back control of a key dam held by ISIS militants, while Ukraine and Russia continue to search for ways to end a conflict there.

Market analysts have said U.S. airstrikes might lower the risk of oil supply disruptions from the country.

Iraq produced approximately 3.5 million barrels a day of oil last month, making it OPEC's second-biggest oil producer behind Saudi Arabia.

And while talks between Russian and Ukraine diplomats have to end in resolution, they are making progress, which pushed prices down and offset upbeat data in the U.S., the world's largest consumer of oil.

The U.S. Commerce Department reported earlier that the number of building permits issued in July jumped 8.1% to 1.052 million units from June's total of 973,000. Analysts expected building permits to rise by 2.5% to 1.0 million units in July.

The report also showed that U.S. housing starts soared by 15.7% last month to hit 1.093 million units from June's total of 945,000, far past expectations for an increase of 8.6% to 969,000 units.

A separate report showed that the U.S. consumer price index rose 0.1% last month from June and 2.0% on year, both figures meeting estimates.

Core consumer prices, which exclude food and energy costs, inched up by 0.1% last month, missing expectations for a 0.2% gain, though the year-on-year rate came in at 1.9%, which met expectations.

On Monday, the National Association of Home Builders/Wells Fargo Housing Market Index increased to 55.0 in August, a seven-month high, from 53.0 in July, beating estimates for a reading of 53.0.

Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were down 0.14% and trading at US$101.46 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$8.70 a barrel. offers an extensive set of professional tools for the financial markets.

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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.

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