US Crude Falls in Light Trading on Weak Economic Data
Brent crude oil rose on Monday and U.S. crude fell in light trading, as support from geopolitical tensions in Ukraine and Libya countered ample supplies and anticipated weak demand after a slew of disappointing economic data from the United States and Europe.
"Liquidity is down because of the holiday in London and the usual August vacation time, And while the market continues to see increasing geopolitical risk in Libya and the Russia, Ukraine situation, traders are more focused so far on concerns about slowing demand with the weak data from Europe and the United States," said Phil Flynn, analyst at Price Futures Group in Chicago, referring to a fall in new home sales and cooling services sector activity in the United States, and weak business sentiment in Germany.
London financial markets are closed because of a national bank holiday.
Brent crude rose 6 cents to $102.35 a barrel by 12:38 p.m. EDT (1638 GMT). It hit a 14-month low of $101.07 on Aug. 19. U.S. crude fell by 39 cents to $93.26 a barrel.
"The market's range-bound; it's consolidating and finding support against previous lows," said Bill Baruch, senior market strategist at iitrader.com in Chicago.
Brent crude has traded largely within a $101 to $106 range in August, and U.S. crude has mostly remained between $93 and $99.
CME Group (CME) delayed the start of trade on its electronic platform by four hours on Monday because of technical problems, the latest glitch to hit the world's largest futures market operator, but traders in the United States and Asia said it had limited impact.
Underlining the extent of the recent selling pressure, exchange data on Monday showed hedge funds and other big speculators, in the week to Aug. 19, cut their bets on rising Brent prices to the lowest in more than two years.
A further recovery in Libyan output, last reported to be 612,000 barrels per day (bpd), looks uncertain, analysts say. Rockets hit an airport in eastern Libya on Monday, a day after fire destroyed the terminal at Tripoli's main airport.
In Europe, Russian President Vladimir Putin will meet his Ukrainian counterpart Petro Poroshenko for the first time in months on Tuesday to try to reach a compromise on Ukraine.
Russia wants to send a second humanitarian aid convoy to eastern Ukraine in the near future, Foreign Minister Sergei Lavrov said on Monday after Kiev and the West criticised Moscow for sending the first convoy without official permission.
The dollar index rose as the U.S. Federal Reserve prepared to lay the groundwork for the central bank's first interest rate increase in nearly a decade.
A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies and tends to weigh on prices.
(By Anna Louie Sussman; Additional reporting by Robert Gibbons in New York, Alex Lawler in London, Florence Tan in Singapore; Editing by Dale Hudson, David Goodman and Gunna Dickson)
