Crude Oil Ends Sharply Lower On Ukraine Worries, China Data

(RTTNews) - U.S. crude oil slipped for a second straight session to end sharply lower on Tuesday, ahead of the official weekly oil report, even as investors continue to mull over demand growth concerns after some Chinese trade data last week end showed the nation's economy to be slowing more than initially estimated.

Oil prices were also impacted due to the ongoing stand-off between Russia and West over developments in Ukraine with the crucial referendum in Crimea coming up for vote next Sunday to determine the status of the region. The referendum will decide if people in the Crimean region would prefer to stay with Ukraine or join Russia.

Crude oil had scaled a yearly high of over $105 a barrel after Russia invaded Ukraine earlier this month.

Investors also await the official weekly oil report from the U.S. Energy Information Administration on Wednesday, with U.S. crude inventories expected to have risen last week. Later today, the American Petroleum Institute will release its supply data.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, plummeted $1.09 or 1.1 percent to close at $100.03 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for April delivery scaled a high of $101.52 a barrel intraday and a low of $99.64.

Yesterday, crude oil prices plummeted after some disappointing Chinese economic data pointed to reduced demand for energy. China's exports unexpectedly tumbled over 18 percent last month, swinging the trade balance into deficit of $22.98 billion.

Natural gas slipped $0.046 to close at $4.605 million British thermal units, with yet another winter storm forecast in the U.S., with a foot of snow projected in parts of the Northeast, less than two weeks from the official start of Spring.

Meanwhile, the U.S. Energy Information Administration in its monthly Short-Term Energy Outlook report on Tuesday lifted its 2014 and 2015 forecast for natural gas. Natural gas prices are indicated to average $4.44 per million British thermal units in 2014 and $4.14 mBtu in 2015. The EIA had previously estimated prices of $4.17 mBtu for 2014 and $4.11 mBtu for 2015.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.74 on Tuesday, down from its previous close of 79.75 late Monday in North American trade. The dollar scaled a high of 79.93 intraday and a low of 79.72.

The euro traded lower against the dollar at $1.3874 on Tuesday, as compared to its previous close of $1.3877 late Monday in North America. The euro scaled a high of $1.3879 intraday and a low of $1.3834.

In economic news, wholesale inventories in the U.S. rose more than expected in January, a report from the Commerce Department showed Tuesday, notwithstanding a steep drop in wholesale sales. Wholesale inventories climbed 0.6 percent in January following an upwardly revised 0.4 percent increase in December. Economists expected inventories to rise by 0.4 percent compared to the 0.3 percent growth originally reported for the previous month.

Meanwhile, the Commerce Department said wholesale sales tumbled 1.9 percent in January after inching up 0.1 percent in December. The drop was partly due to a 3.2 percent decrease in sales of non-durable goods, which edged up by 0.2 percent in the previous month.

From Europe, industrial production growth in U.K. slowed more-than-expected in January as severe weather conditions hampered oil production in the North Sea, data from the Office for National Statistics showed Tuesday. Nonetheless, manufacturing output topped expectations with broad-based expansion in most sub-sectors offsetting sharp contraction in pharmaceutical products. U.K.'s industrial output in January edged up 0.1 percent from December. The output was forecast to expand 0.2 percent, following December's 0.5 percent rise.

Elsewhere, the Bank of Japan on Tuesday refrained from initiating additional easing ahead of the planned sales tax hike in April that could dent the moderate recovery. The central bank's policy board decided by a unanimous vote to leave the size of its monetary easing unchanged. Accordingly, the bank will continue to increase the monetary base at an annual pace of JPY 60 trillion to JPY 70 trillion.

Investors will also focus on a slew of economic data out of the U.S. this week, ahead of the monetary policy meet of the U.S. Federal Reserve due March 19. The major releases slated for the week include weekly jobless claims, business inventories report, producer price index, consumer sentiment, and retail sales report.