Crude Oil Ends Below $47 As IMF Cuts Global Economic Growth Forecast

(RTTNews) - U.S. crude oil plummeted to end over five percent lower Tuesday, after the International Monetary Fund slashed its 2015 global economic growth forecast and with China's economy growing at its slowest in about 25 years.

The IMF has projected global economic growth at 3.5 percent for 2015 and 3.7 percent for 2016, in its latest World Economic Outlook report, down by 0.3 percentage points from earlier estimates.

"New factors supporting growth - lower oil prices, but also depreciation of euro and yen - are more than offset by persistent negative forces," said Olivier Blanchard, the IMF's chief economist.

Meanwhile, official data showed the Chinese economy in 2014 to have registered its weakest growth since 1990. For the fourth quarter, the Chinese economy grew at its slowest pace since early 2009 albeit better than the consensus estimate, data from the National Bureau of Statistics reported Tuesday.

Waning demand for crude oil combined with a massive supply glut has driven oil to its lowest since 2008. Despite some signs of stabilization over the the past few days with speculation that its epic collapse has been overdone, oil prices have once again plummeted.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, plunged $2.66 or 5.4 percent, to settle at $46.47 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for March delivery scaled a high of $49.20 a barrel intraday and a low of $46.34.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.03 on Tuesday, up from its previous close of 92.61 late Monday in North American trade. The dollar scaled a high of 93.05 intraday and a low of 92.55.

The euro trended lower against the dollar at $1.1544 on Tuesday, as compared to its previous close of $1.1608 late Monday in North American trade. The euro scaled a high of $1.1620 intraday and a low of $1.1543.

In economic news, homebuilder confidence in the U.S. showed a modest deterioration in January, a report from the National Association of Home Builders revealed Tuesday. The NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December. Economist expected the index at 58 from the 57 originally reported for the previous month.

Falling oil prices and weak euro boosted German economic confidence to an 11-month high in January, a survey by the ZEW Centre for European Economic Research showed Tuesday. The indicator of economic sentiment rose sharply to 48.4 in January from 34.9 in December, the Mannheim-based institute said. The reading was forecast to rise to 40. This was the third consecutive rise in the index and marked the highest score since February 2014, when the reading was at 55.7.

Elsewhere in Europe, the average asking price for a house in the United Kingdom was up 1.4 percent on month in January, property tracking website Rightmove said on Monday. This follows the upwardly revised 2.2 percent contraction in December (originally -3.3 percent).

From Asia, the Chinese economy grew at the weakest pace since early 2009, with its Gross domestic product, or GDP, rising 7.3 percent in the fourth quarter from a year ago, the same rate as in the third quarter. This was the weakest growth since the first quarter of 2009. However, the growth was stronger than the 7.2 percent rise forecast by economists.

For the year 2014, China's GDP was up 7.4 percent, the weakest growth since 1990. The growth rate was broadly in line with the government's target of about 7.5 percent and more than the 7.3 percent consensus estimate.

China's housing sales declined in 2014, but signaled positive signs in the last few months as market sentiment was boosted by an interest rate cut by the central bank in November. New home sales dropped 7.8 percent in the whole year 2014 to 6.24 trillion yuan, reports said Tuesday citing data from the National Bureau of Statistics. In the first eleven months, home sales slid 9.7 percent from the same period a year ago. In December, home sales climbed 4.2 percent from a year earlier to 938.4 billion yuan.

Chinese retail sales rose 11.9 percent year-over-year in December following the 11.7 percent rise in November, data from the National Bureau of Statistics showed Tuesday. Economists expected sales to increase at the stable rate of 11.7 percent.

China's industrial production rose 7.9 percent year-over-year in December following the 7.2 percent growth in November. Economists expected production to rise 7.4 percent.