Crude Oil Ends Lower On Demand Concerns; Sheds 1.8% For Week

(RTTNews) - U.S. crude oil ended lower Friday, depite the dollar weakening against a basket of major currencies over concerns of a possible government shutdown in Washington on the budget and debt ceiling impasse. Meanwhile, tensions over the Middle-East supply situation eased after the U.S. and Russia agreed on a draft U.N. Security Council resolution to eliminate chemical weapons in Syria, further brightening supply prospects from the region.

Oil prices shed about 1.8 percent for the week.

Relations between the U.S. and Iran seem to be improving, after a meeting between Secretary of State John Kerry and Iranian Foreign Minister was seen as a right step in mending relations between the two nations.

Investors continued to watch closely the U.S. Government's tackling of its budget and debt ceiling issues that will reach the borrowing limit of $16.7 trillion mid October. The Congress urgently needs to raise the debt ceiling by that time, but currently there are no hints of a consensus between the White House and Republican lawmakers on the horizon.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, dropped $0.16 or 0.2 percent to close at $102.87 a barrel on the New York Mercantile Exchange Friday.

Crude prices for November delivery scaled a high of $103.77 a barrel intraday and a low of $102.36.

Yesterday, oil snapped its five-session losing streak to settle higher mostly on some bargain hunting, notwithstanding a strong dollar and the brightening supply prospects with easing tensions in the Middle East, including Iran. Investors also weighed some mixed economic data and the better than expected increase in U.S. crude oil stockpiles last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.25 on Friday, down from 80.53 late Thursday in North American trade. The dollar scaled a high of 80.59 intraday and a low of 80.11.

The euro traded higher against the dollar at $1.3519 on Friday, as compared to its previous close of $1.3489 late Thursday in North America. The euro scaled a high of $1.3564 intraday and a low of $1.3476.

In economic news from the U.S., the Commerce Department said personal income rose by 0.4 percent in August following an upwardly revised 0.2 percent increase in July. The acceleration in the pace of growth matched expectations. Additionally, the Commerce Department said personal spending increased by 0.3 percent in August after rising by an upwardly revised 0.2 percent in the previous month. The spending growth also came in line with estimates.

A report by Thomson Reuters and the University of Michigan on Friday showed an upward revision to their reading on U.S. consumer sentiment in September, although the index still indicated a deterioration in sentiment compared the previous month. The final reading on the consumer sentiment index for September came in at 77.5, above the preliminary reading of 76.8 but still below the final August reading of 82.1.

Elsewhere, eurozone economic confidence rose more than expected in September with markedly improved confidence across all business sectors, the European Commission said. The economic sentiment index climbed to 96.9 in September from 95.3 in August. It stayed above consensus of 96. Among components, improvements in construction and retail trade were particularly pronounced.

Germany's EU harmonized inflation remained unchanged in September, in line with economists' expectations, latest data showed. The harmonized index of consumer prices advanced 1.6 percent on annual basis in September, which was unchanged from the growth rate seen in August, preliminary estimates released by the Federal Statistical Office revealed. The outcome matched economists' expectations.

House prices in the UK increased at a faster pace in September, a survey by the Nationwide Building Society showed. The house price index rose 0.9 percent month-on-month in September, faster than a 0.7 percent increase in August. The gain was stronger than the expected 0.5 percent increase.