Crude Oil Ends Below $92 A Barrel After Iran Deal

(RTTNews) - U.S. crude oil ended sharply lower Monday, as oversupply concerns resurfaced after Iran reached a deal on its nuclear program with major Western powers last weekend. Added to the expectation that Libya would return to normal production and export of its crude oil, prices came under pressure with a looming oversupply scenario globally.

The vital talks between Iran and the major powers including the U.S., Russia, China, Britain, Germany, and France ended with an agreement that seeks to curb Tehran's nuclear development program. The six-month deal will witness easing of sanctions against Iran begining January 20.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, dropped $0.92 or 1.0 percent to close at $91.80 a barrel on the New York Mercantile Exchange Monday.

Crude prices for February delivery scaled a high of $2.88 a barrel intraday and a low of $91.43.

Last week, oil settled at a near eight-month low on concerns of a supply glut with expectations of Libyan oil production and export returning to normal. Speculation of South Sudan increasing its oil production and export also pushed oil prices lower.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.54 on Monday, up from its previous close of 80.63 late Friday in North American trade. The dollar scaled a high of 80.75 intraday and a low of 80.47.

The euro traded lower against the dollar at $1.3671 on Monday, as compared to its previous close of $1.3680 late Friday in North America. The euro scaled a high of $1.3684 intraday and a low of $1.3638.

In economic news, the U.S. recorded a budget surplus of $53 billion in December, resulting in a 41 percent reduction in deficit for the first quarter of 2014, according to the Treasury Department on Monday. The reduction was attributed to the near $40 billion payment from mortgager Fannie Mae and Freddie Mac, and as well increased tax receipts.

The deficit for the first quarter of fiscal year 2014 climbed down $120 billion to $174 billion from a year ago, mostly on lower spending, higher tax revenues, and the ongoing economic recovery.

Meanwhile, the Organization for Economic Cooperation and Development or OECD, said its leading indicator continues to signal an improving economic outlook in most advanced economies. The composite leading index, designed to anticipate turning points in economic activity, rose to 100.9 in November from 100.7 in October, the Paris-based organization said Monday.

OECD indicators point to economic growth firming in Japan, the United States and the United Kingdom. At the same time, the index for Canada indicates a positive change in momentum. In euro area as a whole, and in France and Italy, the indicators suggest a positive change in momentum. In Germany, the indicator showed signals of firming growth. In the emerging economies, the indices point to a tentative positive change in momentum in China and to growth below trend in India.

During this week, traders focus will be on the U.S. Commerce Department's retail sales report for December, the jobless claims report, the National Association of Home Builders' housing market index for January, January manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve, and the Federal Reserve's industrial production report for December.

Investor focus will also be on the crude oil inventories data from the American Petroleum Institute due out Tuesday and the Energy Information Administration due Wednesday.