Crude Oil Ends Lower Ahead Of Supply Data

(RTTNews) - U.S. crude oil ended lower Monday, ahead of the weekly oil report from the Energy Information Administration and the American Petroleum Institute, amid mounting tensions in the Middle East and Greek financial woes continuing to engulf Europe.

Yemen is the backdrop for a proxy conflict between the region's two big powers, Saudi Arabia and Iran. An escalation of Yemen's civil war could threaten supplies from the Persian Gulf, which have overshadowed a massive build in global oil stockpiles, with neither OPEC nor its international competitors capitulating on reduction in output.

Meanwhile, investors continued to remain concerned over Greece's financial health with no indication of any agreement with Athens on the economic reforms required by the European Union to unlock the bailout aid. In the absence of an agreement over economic reforms, the possibility of Greece exiting the eurozone looms large.

As well, the European Central Bank is exploring measures to reduce the Emergency Liquidity Assistance to Greek banks, reports said Tuesday, citing people with knowledge of the discussions. ECB Staff have suggested an increase in the haircuts banks take on the collateral they offer for emergency funding from the Bank of Greece, both Bloomberg and CNBC said.

With no agreement on the anvil, Greek banks may soon run out of collateral to access European Central Bank refinancing unless Athens reaches a deal over the release of another 7.2 billion euros in bailout funds from the European Union. A crucial meeting of euro-area finance ministers is scheduled to take place in Latvia on April 24.

The weekly oil report from the American Petroleum Institute is due later today, while the U.S. Energy Information Administration's inventories report is scheduled for release on Wednesday for the week ended April 17.

Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dropped $1.54 or 2.7 percent, to settle at $56.34 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for June delivery scaled a high of $58.05 a barrel intraday and a low of $56.18.

Light Sweet Crude Oil futures for May delivery shed $1.16 or 2.1 percent, to settle at $55.22 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for May delivery scaled a high of $56.91 a barrel intraday and a low of $55.04.

On Monday, crude oil gained $0.64 or 1.2 percent, to settle at $56.38, as China moved to prop up its slowing economy with a stimulus, even as stockpiles at Cushing delivery point dwindled.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.86 on Tuesday, down from its previous close of 97.90 on Monday in late North American trade. The dollar scaled a high of 98.46 intraday and a low of 97.64.

The euro trended higher against the dollar at $1.0750 on Tuesday, as compared to its previous close of $1.0739 in North American trade late Monday. The euro scaled a high of $1.0781 intraday and a low of $1.0662.

On the economic front, German investor confidence deteriorated for the first time since October as global weakness and Greece crisis weighed on domestic prospects, survey data from the Centre for European Economic Research, or ZEW, showed Tuesday. The indicator of economic sentiment dropped unexpectedly by 1.5 points to 53.3 in April. Economists had forecast the index to improve to 55.3.

The Eurozone government deficit ratio declined in 2014, while government debt increased from last year, Eurostat reported Tuesday. The government deficit to GDP ratio fell to 2.4 percent in 2014 from 2.9 percent in 2013. Meanwhile, the government debt to GDP ratio increased to 91.9 percent from 90.9 percent a year ago.

Meanwhile, the European Central Bank is exploring measures to reduce the Emergency Liquidity Assistance to Greek banks, reports said Tuesday, citing people with knowledge of the discussions. ECB Staff have suggested an increase in the haircuts banks take on the collateral they offer for emergency funding from the Bank of Greece, both Bloomberg and CNBC said.

Early February, the ECB suspended the waiver extended to Greek public securities used as collateral by financial institutions for central bank loans. However, the bank later raised the support for Greek banks under the ELA scheme, which is costlier.

From Asia, the leading index for Japan, which measures the future economic activity was revised down in February, final figures from Cabinet Office showed Tuesday. The leading index fell to 104.8 in February, revised from the preliminary estimate of 105.3. In January, the score was revised to 105.0. The coincident that reflects the current economic activity fell to 110.7 in February, revised from 110.5 in the flash report. In the previous month, the reading was revised to 113.2.