Crude Oil Ends Higher As Dollar Strengthens

(RTTNews) - U.S. crude oil rebounded to end higher on Monday, after having plummeted to a two-year low last week. Oil prices rebounded as the dollar came off its 4-year highs against a basket of major currencies, but the gains were somewhat limited on demand growth concerns.

Doubts over the Chinese economic recovery continued to worry investors, after the World Bank slashed its growth forecast for China to 7.4 percent this year, from a previous outlook of 7.6 percent. This is also below China's own target of about 7.5 percent.

Oil's decline has been pronounced, with demand concerns weighing on prices, even as analysts indicate an excess supply scenario.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, gained $0.60 or 0.7 percent to close at $90.34 a barrel on the New York Mercantile Exchange Monday.

Crude prices for November delivery scaled a high of $90.41 a barrel intraday and a low of $88.76.

On Friday, crude oil plunged to end below the $90-dollar mark after the dollar strengthened on some upbeat jobs data from the U.S., with unemployment rate at its lowest level in over six years even in September.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.98 on Monday, down from its previous close of 86.69 late Friday in North American trade. The dollar scaled a high of 86.68 intraday and a low of 86.05.

The euro trended higher against the dollar at $1.2593 on Monday, as compared to its previous close of $1.2513 late Friday in North American trade. The euro scaled a high of $1.2606 intraday and a low of $1.2510.

In economic news, the World Bank slashed its growth for China to 7.4 percent this year, from a previous forecast of 7.6 percent. This is below China's target of about 7.5 percent. For next year, the lender has now forecast the Chinese economy to grow 7.2%, down from 7.5%. China's growth last year rose 7.7 percent.

Developing East Asia is forecast to expand 6.9 percent this year and the next, the Washington-based lender said in its East Asia Pacific Economic Update on Monday. In April, the bank had projected 7.1 percent growth each for 2014 and 2015.

Excluding China, growth will pick up the next year as a gradual recovery in high-income economies boosts demand for exports from the region, the bank estimated. The growth in developing countries excluding China is expected to bottom out at 4.8 percent in 2014 before rising to 5.3 percent in 2015.

From the eurozone, investor confidence declined for the third straight month, hitting the lowest level since May 2013. The investor confidence index fell to minus 13.7 in October from minus 9.8 percent in September.

Meanwhile, German factory orders declined at the fastest pace since January 2009, driven largely by a fall in capital goods demand, data from Destatis showed Monday. Factory orders fell 5.7 percent month-over-month in August following the 4.9 percent rise in July. This was more than the 2.5 percent drop expected by economists and the biggest decline since January 2009, when orders were down 7.7 percent.

Germany's construction sector stabilized in September ending a five-month period of contracting activity, Markit Economics said Monday. The seasonally adjusted Purchasing Managers' Index rose to 50 from 47.7 in August.

Investors will be paying close attention to the Fed Reserve for clues about whether interest rates will be raised ahead of schedule.