Crude Oil Ends Below $57 On Oversupply, Demand Concerns

(RTTNews) - U.S. crude oil plummeted over 3 percent at close on Monday, as oversupply concerns and worries over global demand continued to weigh down oil. The OPEC is in no hurry to cut oil production even as oil prices continue their epic collapse, a top official from member nation United Arab Emirates said.

The UAE, along with Saudi Arabia among other OPEC nations appear unfazed over an epic drop in prices that has left crude oil at its cheapest since the Great Recession.

UAE energy ministers Suhail Al-Mazrouei downplayed the suggestion the OPEC will have an emergency meeting to discuss whether to keep output unchanged. In fact, Al-Mazrouei said OPEC should wait another few months before even discussing an unscheduled meeting.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, plunged $1.90 or 3.3 percent to close at $55.91 a barrel on the New York Mercantile Exchange Monday.

Crude prices for January delivery scaled a high of $58.73 a barrel intraday and a low of $55.78.

Last week, the International Energy Agency slashed its global oil demand growth forecast for 2015 to 900,000 barrels per day, down 230,000 barrels per day from a previous forecast, with the OPEC having cut its oil demand forecast a few days earlier.

A likely drop in crude oil output is due amid reports of clashes in major Libyan ports Es Sider and Ras Lanuf, and a strike by Nigerian oil workers.

Meanwhile, traders look ahead to the outcome of the U.S. Federal Reserve's monetary policy decision, due on Wednesday. Investors continued to remain focused on the U.S. Federal Reserve's monetary policy, with markets expecting some clues as to the timing of interest rate hikes at the conclusion of its monetary policy meet later this week.

On Friday, crude oil futures ended at $57.81 a barrel, down $2.14 or 3.6 percent, despite a weak dollar, amid concerns over falling demand after the International Energy Agency slashed its global oil demand forecast for 2015. Only a few days earlier, OPEC had cut its oil demand forecast for 2015 to the lowest level in more than a decade.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 88.48 on Monday, up from its previous close of 88.19 late Friday in North American trade. The dollar scaled a high of 88.63 intraday and a low of 88.17.

The euro trended lower against the dollar at $1.2438 on Monday, as compared to its previous close of $1.2464 late Friday in North American trade. The euro scaled a high of $1.2479 intraday and a low of $1.2416.

In economic news from the U.S., the New York Federal Reserve's Empire State manufacturing index came in at negative 3.6 for December, down sharply from November's reading of 10.2. Economists expected the figure to rise to positive 12.0.

In economic news from the U.S., industrial production, a measure of output at the factories, mines and utilities, rose 1.3 percent in November, significantly higher than the growth rate of 0.1 percent in October. Economists expected production to rise 0.7 percent for the month.

U.S. Industrial production in November was up 5.2 percent compared to the same period last year.

A closely-watched measure of confidence among U.S. home builders ticked down in December by one point to 57, but was still close to the nine-year high reached in September, data from the National Association of Home Builders/Wells Fargo showed Monday. Economists expected the gauge at 59 in December from 58 recorded in November. The nine-year high score in September was 59.

Besides the crucial Fed monetary policy, other important economic events this week are the manufacturing surveys by the New York Federal Reserve and updated FOMC forecast, as well as the Fed Chair's press briefing, both due on Wednesday.

Data on consumer price inflation, third quarter current account data, the Conference Board's leading economic indicators index for November and Kansas City Federal Reserve's regional manufacturing survey for December are also due this week.