Crude Oil Ends Lower On Profit Taking

(RTTNews) - U.S. crude ended lower Monday, mostly on profit taking notwithstanding some upbeat U.S. gross domestic product data and an increase in the consumer sentiment index, albeit less than expected. Even a soft dollar failed to enthuse investors, on the back of the U.S. Federal Reserve's move to slash its monthly bond-buying program by $10 billion in January next.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, shed $0.41 or 0.4 percent to close at $98.67 a barrel on the New York Mercantile Exchange Monday.

Crude prices for February delivery scaled a high of $99.31 a barrel intraday and a low of $98.67.

Yesterday, oil settled higher on improved demand outlook and after the U.S. Federal Reserve decided to slash its monthly bond-buying program by $10 billion, following its two-day policy review meet Wednesday. The Fed expects to see sustained jobs creation and an uptick in the rate of inflation before further scaling back their unprecedented support measures. Any further reduction in the size of stimulus will be contingent on economic data.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.41 on Monday, down from 80.55 late Friday in North American trade. The dollar scaled a high of 80.55 intraday and a low of 80.32.

The euro traded higher against the dollar at $1.3697 on Monday, as compared to its previous close of $1.3673 late Friday in North America. The euro scaled a high of $1.3716 intraday and a low of $1.3670.

In economic news from the U.S., the Commerce Department said gross domestic product increased by 4.1 percent in the third quarter compared to the 3.6 percent growth estimated earlier this month. Economists had expected the pace of GDP growth to be unrevised.

Consumer sentiment in the U.S. showed a notable improvement in December, with a final reading on the index at 82.5, up from the final November reading of 75.1, a report released by Thomson Reuters and the University of Michigan showed Friday. The consumer sentiment index was unrevised from the preliminary estimate. The monthly increase further offset recent decreases, with the index climbing back toward the six-year high of 85.1 set in July.

Meanwhile, a Commerce Department report on Monday showed U.S. personal income rose less than expected in November, creeping up 0.2 percent after edging down 0.1 percent in October. Economists expected personal income to increase by about 0.5 percent. Nonetheless, personal spending rose 0.5 percent in November after a 0.4 percent increase in October. The increase was in line with estimates.

From the eurozone, German consumer confidence is set to rise to its highest level in more than six years in January, a survey by market research group GfK revealed. The forward-looking consumer climate index for January rose to 7.6 in from 7.4 in December. Economists had forecast the index to remain at the December level.

Meanwhile, Standard & Poor's lowered the sovereign ratings of the European Union from 'AAA' on Friday, citing deterioration in overall creditworthiness of member states amid contentious EU budgetary negotiations. The long-term ratings were lowered to 'AA+', while it affirmed short-term credit rating at 'A-1+'. The 'stable' outlook reflects the assessment that the risks to the long-term rating on the EU are balanced, S&P said.

Elsewhere, the British economy expanded 0.8 percent quarter-on-quarter in the third quarter, unrevised from the second estimate published on November 27, the Office for National Statistics said in the latest estimates released . However, the statistical agency slightly revised up the GDP figure for the second quarter to show a 0.8 percent expansion compared with the previously reported 0.7 percent growth.