Crude Oil Declines Sharply, Ends Below $107

(RTTNews) - U.S. crude oil ended sharply lower Monday, due mainly to lack of direction after the dollar weakened against some major currencies on some weaker-than-expected U.S. existing home sales in June and ahead of the weekly oil inventory data.

U.S. existing home sales fell more than expected in June, data from the National Association of Realtors showed on Monday. Notwithstanding the decline, rate for June was the second-highest since November 2009, as buyers scrambled to lock in low interest rates that have been on the rise this summer.

Investors also weighed China's move to remove any control on lending rates, with banks now free to set their own rates. In the political arena, Japanese Prime Minister Shinzo Abe's ruling Liberal Democratic Party's decisive win in parliamentary elections also strengthened hopes that Abe would be able to push ahead with difficult economic reforms long overdue in the island nation.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $0.93 or 0.9 percent to close at $106.94 a barrel on the New York Mercantile Exchange Monday.

Crude prices for September delivery scaled a high of $108.79 a barrel intraday and a low of $106.43.

Last week, oil advanced to a one-and-half year high tracking rising global equity markets on some better-than-expected initial job claims data from the U.S. and a more-than-expected drop in weekly crude oil inventories.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.17 on Monday, down from 82.62 late Friday in North American trade. The dollar scaled a high of 82.55 intraday and a low of 82.05.

The euro traded higher against the dollar at $1.3187 on Monday, as compared to $1.3139 late Friday in North America. The euro scaled a high of $1.3218 intraday and a low of $1.3138.

In economic news from the U.S., the National Association of Realtors said June existing home sales on a seasonally adjusted basis fell 1.2 percent to an annual rate of 5.08 million from a downwardly revised 5.14 million in May. Economists were expecting existing home sales to rise to around 5.25 million. Despite the modest decline, the June rate was second-highest since November 2009, as buyers scrambled to lock in low interest rates that have been on the rise this summer.

Elsewhere, the euro area government debt continued to increase in the first quarter, with highest burden in Greece, data released by Eurostat showed. The government debt to GDP ratio rose to 92.2 percent at the end of the first quarter, from 90.6 percent at the end of the fourth quarter of 2012. Securities other than shares accounted for 77.1 percent of general government debt. Greece logged the highest debt of 160.5 percent of GDP, followed by Italy with 130.3 percent and Portugal with 127.2 percent. The lowest ratios were seen in Estonia, Bulgaria and Luxembourg.

U.K. household finance sentiment was at its strongest level since the survey began in February 2009, data from Markit Economics showed Monday. The headline household finance index that measures changes in consumer behavior, rose to 41.5 in July from 40.8 in June. Nonetheless, the reading remained below the neutral 50 mark.

Germany's economic growth is set to slow in the third quarter, following a rebound in the second quarter of the year, Bundesbank said in its monthly bulletin on Monday. The central bank indicated signs of slowing down of economic growth were stronger.