Crude Oil Ends Lower On Data, Strong Dollar

(RTTNews) - U.S. crude oil snapped a three-day gain to settle lower Tuesday, on the dollar strengthening against some major currencies and some soft economic data out of the U.S. with consumer confidence tumbling. Meanwhile, the U.S. Federal Reserve's policy meet began with investors expecting the Fed to keep its quantitative easing program intact following a slew of downbeat data, with renewed doubts on the state of the economy.

With the Fed widely expected to maintain its asset purchase program at the current pace, investor focus will be on indications regarding future tapering. The U.S. Federal Reserve began its two-day meet to review and assess its economic policy earlier today, with analysts anticipating the central bank to maintain its $85 billion monthly asset purchase program intact.

In some weak economic data from the U.S., a Conference Board report indicated a substantial deterioration in consumer confidence in October, with the government shutdown weighing on expectations. Separately, a Commerce Department report showed unexpected drop in retail sales due mainly to sharply lower auto sales.

Meanwhile, a Labor Department report indicated decrease in producer prices in September, with a notable drop in food prices offsetting an increase in energy prices. The only bright spot was the U.S. business inventories report which rose in line with estimates in August.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, shed $0.48 or 0.5 percent to close at $98.20 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for December delivery scaled a high of $98.57 a barrel intraday and a low of $97.82.

Oil settled higher yesterday, with the dollar trending higher with demand outlook for the commodity getting a boost with some upbeat data showing U.S. industrial production to have risen more than expected in September.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.64 on Tuesday, up from 79.33 late Monday in North American trade. The dollar scaled a high of 79.67 intraday and a low of 79.29.

The euro traded lower against the dollar at $1.3747 on Tuesday, as compared to its previous close of $1.3785 late Monday in North America. The euro scaled a high of $1.3813 intraday and a low of $1.3738.

In economic news, a Conference Board report on Tuesday showed U.S. consumer confidence deteriorated in October, largely due to the government shutdown. The consumer confidence index tumbled to 71.2 in October from an upwardly revised 80.2 in September. Economists expected the index to fall to 75.0 from the 79.7 originally reported for the previous month. The index was its lowest level since April.

U.S. retail sales unexpectedly saw a modest drop in September, with auto sales showing a significant decrease, a Commerce Department report showed Tuesday. Retail sales for September edged down by 0.1 percent following a 0.2 percent increase in August. Economists expected retail sales to come in unchanged. The unexpected drop was largely due to a 2.2 percent decrease in motor vehicle and parts dealer sales, which followed a 0.7 percent increase in the previous month.

Business inventories in the U.S. rose in line with estimates in August, a report from the Commerce Department showed Tuesday. Business inventories rose by 0.3 percent in August following a 0.4 percent increase in July. The increase was in line with expectations.

With a notable drop in food prices offsetting an increase in energy prices, producer prices in the U.S. unexpectedly dropped in September, a report from the Labor Department indicated Tuesday. Producer price index edged down by 0.1 percent in September following a 0.3 percent increase in August. Economists expected prices to increase by about 0.2 percent in September.