Crude Oil Plunges To End Below $44 On Demand Growth Worries

(RTTNews) - U.S. crude oil futures snapped a three-day gain to end sharply lower on Monday, on demand growth concerns with economic reports worldwide suggesting a slowdown globally, even as stock markets in U.S. and Europe trended firmly lower.

The International Monetary Fund Managing Director Christine Lagarde said global growth outlook is likely to be revised down due to weak expansion in emerging economies. Emerging economies are no longer pulling the recovery, while developed countries are gaining momentum, Lagarde added.

A growth of 3.3 percent this year is no longer realistic, nor 3.8 percent global growth next year, the IMF Chief said. Nonetheless, she expects growth to remain above the 3 percent threshold.

European markets ended solidly in negative territory as concerns over China returned to the forefront, after some disappointing economic data, prompting further weakness in commodity prices.

U.S. stocks were trading deeply in the red after some weak economic cues out of China, once again raising concerns about the health of the global economy. The Dow Jones Industrial Average is currently down 1.68 percent, the Nasdaq is trending lower by 2.78 percent, and the S&P 500 is down 2.30 percent.

China's industrial profits declined in August as product prices continued to decrease, the National Bureau of Statistics reported Monday. Falling product prices as well as lower return on investment weighed on industrial profits.

Meanwhile, economic news from the U.S. showed National Association of Realtors' pending home index, a measure of strength in the housing market, unexpectedly declined in August, raising concerns that home sales might be poised for a decline in the near future.

Meanwhile, Fed Chief Janet Yellen addressing an audience at the University of Massachusetts said if the FOMC were to delay the start of the policy normalization process for too long, it would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting its goals.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, plummeted $1.27 or 2.8 percent, to settle at $44.43 a barrel on the New York Mercantile Exchange Monday.

Crude prices for November delivery scaled a high of $45.58 a barrel intraday and a low of $44.30.

On Friday, crude oil gained $0.79 or 1.8 percent, to settle at $45.70 a barrel, after Fed Chairman Janet Yellen provided some clarity on possible interest rate hikes last night in Massachusetts. Yellen gave an upbeat assessment of the economy and reiterated that the Fed will likely raise rates by the year end.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.01 on Monday, down from its previous close of 96.22 in late North American trade on Friday. The dollar scaled a high of 96.50 intraday and a low of 95.90.

The euro trended higher against the dollar at 1.1225 on Monday, as compared to its previous close of 1.1198 in North American trade late Friday. The euro scaled a high of 1.1250 intraday and a low of 1.1148.

On the economic front, the National Association of Realtors' measure of strength in the U.S. housing market unexpectedly declined for August, raising concerns that home sales figures might be poised for a decline in the near future. The National Association of Realtors' pending home index fell 1.5 percent in August. Economists expected a 0.5 percent increase for the month.

Consumer spending rose a little more than economists had predicted last month, according to new government statistics released Monday. This came despite a slower-than-expected expansion in income. Data released by the U.S. Department of Commerce showed that personal spending rose by 0.4 percent in August. Economists had expected the figure to rise by 0.3 percent.

Personal income in the U.S. also increased during the month. The figures showed a 0.3 percent advance during August, below expectations of a 0.4 percent increase.

China's industrial profits declined in August as product prices continued to decrease, the National Bureau of Statistics reported Monday. Industrial profits fell 8.8 percent in August from a year ago, following a 2.9 percent drop in July.

England/Wales house price growth eased to a 21-month low in August, data from Land Registry showed Monday. House prices advanced 4.2 percent year-on-year in August, which was the slowest growth since November 2013, when it climbed 3.5 percent. In July, house prices rose 4.6 percent and by 4.9 percent in June.