Crude Oil Plummets To End At 2-Year Low On Supply Glut Concerns

(RTTNews) - U.S. crude oil plummeted 3.6 percent to end at a two-year low Tuesday, on concerns of a supply glut after news reports said the Organization of the Petroleum Exporting Countries increased crude production in September, even as Libyan production reached its highest level in over a year.

With the sharp drop, crude oil recorded its lowest settlement since November 2012, a drop of 13 percent for the quarter. Crude prices shed 5.3 percent for the month.

Investors also await the weekly oil reports from the American Petroleum Institute for the week ended September 26 later in the day, while the U.S. Energy Information Administration report is due Wednesday.

Investors also continued to monitor the situation in Syria where the U.S. led allies launched a few airstrikes on Islamic State militants.

In some soft economic news, consumer confidence in the U.S. unexpectedly fell from 7-year highs in September amid concerns over the outlook for employment, even as U.S. home prices rose at an anemic pace in July, the S&P/Case-Shiller's 20-city composite index showed Tuesday.

Further, the Chicago-area manufacturing activity continued to expand in September, albeit at a slower pace than the previous month, the Institute for Supply Management - Chicago said Tuesday.

Elsewhere, the HSBC China Manufacturing PMI showed sluggish economic growth with a final reading of 50.2 in September, which is unchanged from August.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, plunged $3.41 or 3.6 percent to close at $91.16 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for November delivery scaled a high of $94.90 a barrel intraday and a low of $90.92.

On Monday, crude oil futures ended sharply higher on supply worries and as well on data from the U.S. that showed a bigger than expected increase in consumer spending in August. Crude oil also found support from the upcoming temporary refinery closures ahead of the winter and on some unplanned refinery shutdowns in Canada and the U.S.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.91 on Tuesday, up from its previous close of 85.62 late Monday in North American trade. The dollar scaled a high of 86.22 intraday and a low of 85.49.

The euro trended lower against the dollar at $1.2631 on Tuesday, as compared to its previous close of $1.2686 late Monday in North American trade. The euro scaled a high of $1.2702 intraday and a low of $1.2572.

In economic news from the U.S., the Conference Board's Consumer Confidence Index declined to 86.0 in September, down from an upwardly revised reading of 93.4 in August, after having risen for four consecutive months. Economists expected the index to edge up to 92.5 in September, against the initial August reading of 92.4.

A report from the Institute for Supply Management - Chicago on Tuesday showed the Chicago PMI to have decreased 3.8 points to 60.5 in September, falling slightly short of expectations for a reading of 61. A reading above 50 indicates expansion.

U.S. home prices rose at an anemic pace in July, an S&P/Case-Shiller's 20-city composite index showed Tuesday. Home prices were up only 0.6 percent in July from the previous month, slower than the 1 percent rise in June. Analysts expected the index to rise by 1.1 percent on a non-seasonally adjusted basis in July.

From Europe, the U.K. economy grew more than estimated in the second quarter, the Office for National Statistics said Tuesday. Gross domestic product grew 0.9 percent sequentially, up from the prior estimate of 0.8 percent. The annual growth was confirmed at 3.2 percent. GDP was 2.7 percent higher than the pre-economic downturn peak of 2008 instead of 0.2 percent.

U.K. current account deficit increased to GBP 23.1 billion in the second quarter from a revised shortfall of GBP 20.5 billion in the first quarter. The second quarter deficit equated 5.2 percent of GDP.

Meanwhile, unemployment rate in the eurozone remained stable as expected in August, a report from Eurostat showed Tuesday. The jobless rate came in at 11.5 percent in August, the same rate as in July. This was in line with economists' expectations. In the corresponding month of the previous year, the unemployment rate was at 12 percent.

Investors also look ahead to a slew of U.S. economic data this week, including the Labor Department's monthly jobs report, due Friday.