Crude Oil Plummets 3% To End Below $93 On Demand Growth Concerns

(RTTNews) - U.S. crude oil snapped a four-day gain to end sharply lower Tuesday, on concerns over demand growth prospects as the dollar strengthened against some major currencies with some weak Chinese factory data outweighing persistent worries about the situation Ukraine.

Investors look ahead to the weekly crude oil reports, with the American Petroleum Institute set to release its weekly oil report later in the day, while the U.S. Energy Information Administration is scheduled to release its inventory data on Wednesday.

The crisis in eastern Ukraine continued unabated with reports of heavy fighting, as calls for a ceasefire were largely ignored even as Ukraine is reported to be unwilling to give up the fight against pro-Russia separatists.

Meanwhile in Libya, clashes between Islamist militants and the government forces, left more than 30 people dead since Monday, according to news reports.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, plummeted $3.08 or 3.2 percent to close at $92.88 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for October delivery scaled a high of $95.91 a barrel intraday and a low of $92.68.

On Friday, crude oil futures had ended sharply higher, on the back of some upbeat U.S. economic data and a bigger than expected decline in crude oil stockpiles in the previous week. Oil gained nearly 2.5 percent, last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.98 on Tuesday, up from its previous close of 82.79 late Friday in North American trade. The dollar scaled a high of 83.04 intraday and a low of 82.75.

The euro trended lower against the dollar at $1.3125 on Tuesday, as compared to its previous close of $1.3129 late Friday in North American trade. The euro scaled a high of $1.3137 intraday and a low of $1.3110. In economic news from the U.S., the Institute for Supply Management on Tuesday said its purchasing managers index jumped to 59.0 in August, with the index of activity in the manufacturing sector climbing to a three-year high from 57.1 in July. A reading above 50 indicating growth in the manufacturing sector. Economists expected the index to edge down to 56.8. The manufacturing index was at its highest since reaching 59.1 in March of 2011.

Meanwhile, construction spending in the U.S. jumped 1.8 percent to an annual rate of $981.3 billion in July after falling by 0.9 percent to a revised $963.7 billion in June, a Commerce Department report showed. Economists expected spending to increase by about 1.0 percent compared to the 1.8 percent drop originally reported for the previous month.

From Europe, U.K 's construction activity grew at a faster pace in August, defying expectations of a slow down, a a survey by Markit Economics and the Chartered Institute of Purchasing & Supply, or CIPS, showed Tuesday. The Markit/CIPS construction purchasing managers' index rose to 64 in August from 62.4 in July. Economists expected the index at 61.5. This marked the fastest rate of increase since January and the second-strongest rate of expansion since the pre-recession peak of August 2007.

From the eurozone, prices of goods from euro zone factories resumed their decline in July, putting further pressure on the European Central Bank to announce monetary stimulus at this week's meeting. Producer prices fell 0.1% from June, and were down 1.1% from July 2014, according to the European Union's statistics.

During the week, traders will be looking ahead to a slew of economic reports including the U.S. non-farm payrolls data for August. The private sector employment report from ADP and weekly jobless claims data are also awaited.