Crude Oil Ends Higher, But Still Below $93

(RTTNews) - U.S. crude oil ended higher Monday, on some encouraging economic data out of the U.S. even as investors await cues from the two-day Federal Reserve policy meet due Wednesday. Investors largely ignored some disappointing data from China that showed industrial production and retail sales to have increased slower than expected in August.

Data released by the National Bureau of Statistics over the weekend showed Chinese industrial production and retail sales to have increased slower than expected in August.

Earlier last week, the Organization of the Petroleum Exporting Countries and the International Energy Agency had revised downward their oil demand forecasts for 2015.

The U.S. last week imposed more sanctions on several entities in the Russian energy and defense sectors, as also on some major financial institutions including Russia's largest bank Sberbank.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, gained $0.65 or 0.7 percent to close at $92.92 a barrel on the New York Mercantile Exchange Monday.

Crude prices for October delivery scaled a high of $92.97 a barrel intraday and a low of $90.63.

On Friday, crude oil futures declined $0.56 or 0.6 percent to end at $92.27 a barrel, on renewed concerns of a supply glut after the U.S. imposed new sanctions on Russia for its involvement in stoking the conflict in eastern Ukraine, following the European Union sanctions earlier. Crude Oil futures shed 1.1 percent last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.22 on Monday, up from its previous close of 84.17 late Friday in North American trade. The dollar scaled a high of 84.41 intraday and a low of 84.15.

The euro trended lower against the dollar at $1.2939 on Monday, as compared to its previous close of $1.2973 late Friday in North American trade. The euro scaled a high of $1.2973 intraday and a low of $1.2910.

Bank of America Merrill Lynch on Friday forecast the first rate increase may occur in June 2015, three months ahead of its earlier projection.

According to data released by the National Bureau of Statistics over the weekend, industrial production in China rose 6.9 percent year-over-year in August following the 9 percent rise in July, with growth slowing for the second straight month and hitting its slowest pace in over 5 years.

Chinese retail sales expanded by a smaller than expected 11.9 percent year-over-year in August, slower than the 12.2 percent increase in July.

In economic news from the U.S., investors largely shrugged off a report from the Federal Reserve Bank of New York that showed business activity in the New York manufacturing sector to have expanded at a robust pace in September, lifting the headline business conditions index to 27.5, a near five-year high. Economists expected the index at 16.0.

With manufacturing output falling for the first time since January, the Federal Reserve report on U.S. industrial production showed an unexpected decline in August. Industrial production edged down 0.1 percent in August after inching up by a downwardly revised 0.2 percent in July. Economists expected production to climb by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Meanwhile, the OECD projected 0.8 percent growth this year in euro area, down from the 1.2 percent expansion estimated in May. For 2015, growth is estimated at 1.1 percent. The Paris-based think tank recommended more monetary support for the euro area, stating that recent actions by the ECB though welcome, measures including quantitative easing are warranted.

It is widely expected that the U.S. Federal Reserve, which will conclude its two-day policy meeting this Wednesday, will further reduce the pace of its bond purchases. The focus is on what the Fed has to say about the outlook for interest rates.

Results of a couple of regional manufacturing surveys, reports on housing starts and homebuilder confidence and weekly jobless claims data are also awaited.

Among other data due this week are the Labor Department 's August producer prices report for final demand, the Commerce Department's current account data for the second quarter, and the Conference Board's leading economic indicators.