Crude Oil Ends Near $50 On Renewed Supply Glut Worries

(RTTNews) - U.S. crude oil plummeted 5 percent to end lower on Monday, touching lows not seen in more than five and a half years amid further evidence of a global supply glut.

Crude oil's extraordinary plunge to new depths came amid reports that oil supplies from Russia and Iraq surged to its highest level in decades, with the two joining a number of major producers refusing to curb production.

Russian oil production rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day, according to preliminary data from the Kremlin's energy ministry.

Meanwhile, Saudi Arabia on Monday slashed its monthly oil prices for European consumers and further trimmed prices for U.S. refiners. Nonetheless, Saudi Arabia increased its rates for Asia.

Saudi Aramco lowered its February price for Arab Light crude to Northwest Europe by $1.50, which is at a discount of $4.65 a barrel when compared to the Brent Weighted Average.

Meanwhile, Americans continue to enjoy the benefits of the supply glut, while paying less at the pump these days, with the national average for a gallon of gasoline dropping to $2.18.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, plunged $2.65 or 5.0 percent to close at $50.04 a barrel on the New York Mercantile Exchange Monday.

Crude prices for February delivery scaled a high of $52.73 a barrel intraday and a low of $49.92.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 91.38 on Monday, down from its previous close of 91.45 late Friday in North American trade. The dollar scaled a high of 91.78 intraday and a low of 91.23.

The euro trended lower against the dollar at $1.1941 on Monday, as compared to its previous close of $1.2003 late Friday in North American trade. The euro scaled a high of $1.2003 intraday and a low of $1.1889.

Eurozone investor confidence unexpectedly rose for a third straight month, moving into the positive territory led by Germany, data from Sentix showed Monday. The investor confidence index climbed to 0.9 from -2.5 in December. Economists had forecast an improvement in the measure to -1.

Germany's inflation slowed more-than-expected in December, preliminary figures from Destatis showed Monday. The harmonized index of consumer prices edged up 0.1 percent annually following a 0.5 percent gain in the previous month. Economists expected the index to increase 0.2 percent. This was the lowest reading since October 2009, when prices fell 0.1 percent.

Elsewhere in Europe, the strength of recovery in the U.K. construction sector moderated to its lowest since July 2013, data from Markit Economics showed Monday. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index for the construction sector fell more-than-expected to 57.6 in December from 59.4 in November. The score was forecast to fall to 59 in December.

Traders will get a better handle on the outlook for commodities this week amid the release of a slew of first-tier economic data. December's jobs report, the results of the Institute for Supply Management's non-manufacturing survey for December, the minutes of December 17th FOMC meeting and some Fed speeches are on the calendar.

The unfolding week's economic calendar is fairly busy, giving oil traders their first chance in 2015 to gauge some crucial data, including non-farm and private payrolls employment reports for December.