Crude Oil Ends Sharply Lower On Strong Supplies

(RTTNews) - U.S. crude oil ended sharply lower on Friday, on demand growth concerns after news of strong supply from the Middle East, with markets discounting reports that Saudi Arabia has cut its crude output.

News that Saudi Arabia shipped lesser crude last month was dismissed by markets, indicating higher oil production from the country at at 9.70 million barrels a day in September. News reports also indicate strong supply from the OPEC, with increased shipments from Iraq and Libya, notwithstanding the ongoing turmoil in the region.

Concerns over the spread of the Ebola virus globally also weighed on oil prices, after confirmed reports of a doctor infected with the Ebola virus in New York City.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, shed $1.08 or 1.3 percent to close at $81.01 a barrel on the New York Mercantile Exchange Friday.

Crude prices for December delivery scaled a high of $81.95 a barrel intraday and a low of $80.36.

On Thursday, crude oil futures surged $1.57 or 1.9 percent at $82.09 a barrel after very nearly falling below $80 dollar intraday. Reports that Saudi Arabia has cut its crude output and some upbeat corporate earnings and economic data lifted oil prices from the 27-month lows.

According to reports Saudi Arabia shipped 9.36 million barrels a day last month, down 328,000 barrels a day from August. However, Saudi Arabia's oil production was up slightly last month, at 9.70 million barrels a day.

OPEC had earlier indicated the cartel will maintain its output without any cut in production, with some member countries preferring to slash prices in order to gain share of the market.

Last week, U.S. oil prices had tumbled to the lowest level in more than 2 years, amid concerns over excess supply globally, with OPEC member countries reportedly unwilling to cut crude production.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.70 on Friday, down from its previous close of 85.83 late Thursday in North American trade. The dollar scaled a high of 85.91 intraday and a low of 85.54.

The euro trended higher against the dollar at $1.2675 on Friday, as compared to its previous close of $1.2647 late Thursday in North American trade. The euro scaled a high of $1.2695 intraday and a low of $1.2636.

On the economic front, a report from the U.S. Commerce Department showed new home sales to have inched up 0.2 percent to an annualized rate of 467,000 in September from the revised August rate of 466,000. Economists expected new home sales to drop to a rate of 460,000 from the 504,000 originally reported for the previous month.

In economic news from eurozone, German consumer confidence index rose slightly to 8.5 in November, up from 8.4 in the preceding month, a report from market research group GfK showed. The score was forecast to fall to 8.

Elsewhere in Europe, the U.K. economy grew at a slower pace in the third quarter in face of rising uncertainty stemming from global economic conditions, preliminary estimates from the Office for National Statistics Office showed Friday. Gross domestic product climbed 0.7 percent from the second quarter, when it grew 0.9 percent. The sequential growth rate was in line economists' expectations.

As expected, GDP was 3 percent higher in the third quarter compared with the same quarter a year ago. GDP was estimated to be 3.4 percent higher than the pre-economic downturn peak of the first quarter of 2008, ONS said.

There are concerns about about the health of eurozone banking industry with reports from Spanish new agency Efe indicating that eleven banks from six euro zone countries are set to fail the stress tests, with the results due on Sunday.