Crude Oil Ends Lower On Strong Dollar; Sheds About 0.9% For Month

(RTTNews) - U.S. crude oil ended lower on Friday, tracking declining global equity markets, with investors concerns over slowing economic growth in emerging markets and demand for oil. The dollar continued to strengthen against a basket of major currencies, making the oil more expensive to holders of foreign currencies.

Crude oil shed about 0.9 percent for the month, but gained 0.9 percent for the week.

Global equity markets have been impacted with concerns over slowing economic growth in emerging markets led by China, further aggravated after the U.S. Federal Reserve move to taper its quantitative easing program.

On Wednesday, the Federal Reserve slashed its monthly bond buying program by a further $10 billion to $65 billion. The Fed said growth in economic activity picked up in recent quarters, although labor market indicators were mixed but on balance showed further improvement.

Investors also weighed the official Energy Information Administration's weekly oil report that showed a jump in U.S. crude stockpiles, with gasoline and distillate inventories declining more than anticipated.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, shed $0.74 or 0.8 percent to close at $97.49 a barrel on the New York Mercantile Exchange Friday.

Crude prices for March delivery scaled a high of $98.39 a barrel intraday and a low of $97.10.

Yesterday, oil ended at a one-month high on some encouraging economic growth data from the U.S., even as the dollar strengthened following the U.S. Federal Reserve's move to further reduce its monthly bond-buying program by $10 billion.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.24 on Friday, up from its previous close of 81.05 late Thursday in North American trade. The dollar scaled a high of 81.32 intraday and a low of 80.99.

The euro traded lower against the dollar at $1.3497 on Friday, as compared to its previous close of $1.3555 late Thursday in North America. The euro scaled a high of $1.3570 intraday and a low of $1.3480.

In economic news, a Thomson Reuters and University of Michigan report on Friday showed an upward revision to their consumer sentiment index for January, although the report still showed a drop in sentiment compared to December. The consumer sentiment index for January was upwardly revised to 81.2 from the preliminary reading of 80.4. This is slightly above economists' estimates of 81.0, but still below the final December reading of 82.5.

Personal income in the U.S. came in nearly unchanged in December, although personal spending increased more than expected, a report from the Commerce Department showed Friday. Personal income inched up by less than a tenth of a percent in December after rising by 0.2 percent in November. Economists expects a 0.2 percent increase. Personal spending climbed by 0.4 percent in December following a 0.6 percent increase in November. The growth exceeded economists' estimates for a 0.2 percent uptick.

Meanwhile, the Chicago-area business activity saw continued growth in the month of January, although the pace of growth continued to slow, a report from MNI Indicators showed Friday. The Chicago Business Barometer dropped to 59.6 in January from a revised 60.8 in December, although a reading above 50 indicates continued growth. Economists expected the barometer at a reading of 59.0. The business barometer fell for the third consecutive month following October's jump to the highest reading since March of 2011.

Eurozone inflation dropped for the second month in a row in January, to 0.7 percent from 0.8 percent in December, flash estimates released by Eurostat showed Friday. Economists expected inflation to accelerate to 0.9 percent in January.

German retail sales declined unexpectedly, with retail turnover dropping 2.5 percent in real terms in December from a month ago, reversing November's 0.9 percent rise, provisional results from Destatis showed Friday. Sales were expected to increase by 0.2 percent.