RTTN:Crude Oil Ends Higher Ahead Of U.S. Pres. Election
U.S. crude oil rebounded to end higher Monday after having recorded a sharp decline last session, mostly on bargain hunting with uncertainty surrounding the U.S. presidential elections tomorrow. Nevertheless, oil prices were impacted by the dollar continuing to strengthen against a basket of major currencies, with the euro trending down on renewed eurozone worries with Greece in focus.
Investors also considered some mixed global macroeconomic data with the eurozone investor confidence showing an improvement in November, while the U.S. non-manufacturing index dropped in October. Elsewhere, China's service sector expansion eased marginally in October amid further moderation in new order growth.
Light Sweet Crude Oil futures for December delivery gained $0.79 or 0.9 percent to close at 85.65 a barrel on the New York Mercantile Exchange Monday.
Crude prices scaled a high of $85.88 a barrel intraday and a low of $84.34.
Last week, oil settled at a fresh 3-month low with demand for crude expected to be lower than anticipated in the aftermath of Hurricane Sandy. The U.S. dollar continued to strengthen against a basket of major currencies after some upbeat jobs data out of the U.S., put pressure on oil prices.
The euro trended down to a near two-month low ahead of the U.S. presidential elections, with mounting investor concerns over the Greek imbroglio with the beleaguered country's next installment of bailout fund remain uncertain.
The euro traded lower against the dollar at $1.2789 on Monday, as compared to $1.2818 late Friday in North America. The euro scaled a high of $1.2850 intraday and a low of $1.2768.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.75 on Monday, up from 80.56 in North American trade late Friday. The dollar scaled a high of 80.84 intraday and a low of 80.50.
In economic news from the U.S, the Institute for Supply Management said its non-manufacturing index dipped to 54.2 in October from 55.1 in September, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to edge down to a reading of 54.9.
Elsewhere, confidence among eurozone investors increased for a third month in a row in November, reflecting an improvement in their assessment of the current situation as well as expectations of future economic developments, data released by the think-tank Sentix showed. The Sentix Index rose to -18.8 in November from -22.2 in October and -23.2 in September. Economists had forecast an increase in the reading to -21.1.
China's service sector expansion eased marginally with the headline HSBC business activity index that measures the performance of the services sector, dropped to 53.5 in October from 54.3 in September, as higher costs and greater competition squeezed margins. A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
The composite output index that measures the performance of both manufacturing and services, posted 50.5 in October, up from 50.3 in September. This was the second successive monthly rise in output at the composite level. However, a Markit survey of the manufacturing sector signaled a full year of monthly deterioration in business activity.
During the week, traders will focus on the Commerce Department's trade balance report for September, the weekly jobless claims report and the preliminary reading of the Reuters and the University of Michigan's consumer sentiment survey for November.
Also on focus will be on the crude oil inventories data from the American Petroleum Institute due Tuesday and the weekly oil report from the Energy Information Administration on Wednesday.
